September 11, 1984 CONGRESSIONAL RECORD-SENATE 24737 SENATE-Tuesday, September 11, 1984

The Senate met at 9:30 a.m., on the RECOGNITION OF THE ACTING ing bill would be taken down today, expiration of the recess, and was MAJORITY LEADER that these are alternatives. called to order by the Honorable The ACTING PRESIDENT pro tem­ Mr. PROXMIRE. I thank the Sena­ DANIEL J. EvANs, a Senator from the pore. Under the previous order, the tor. State of Washington. acting majority leader is recognized. Mr. WARNER. But I would not in any way suggest that I know of a PRAYER reason or the majority leader knows of a reason why we should not proceed in The Chaplain, the Reverend Rich­ SENATE SCHEDULE Mr. WARNER. Mr. President, the an orderly course to the consideration ard C. Halverson, D.D., offered the fol­ of S. 2851. lowing prayer: majority leader, Mr. BAKER, is at this time at the White House conferring Mr. PROXMIRE. Mr. President, I Let us pray. with the President and others. thank my good friend from Virginia, Father in Heaven, we pray for the 28 The calendar for this morning's ac­ and as a member of the Banking Com­ Senators up for reelection, over whom tivities provides leadership time of 10 mittee, and as one managing the bill hangs the heavy responsibility for minutes each, followed by a special on the minority side, I earnestly hope their campaigns while the Senate con­ order for Mr. PRoXMIRE, the Senator that the Senate will stay with the tinues in session. They do not cam­ from Wisconsin, of 15 minutes; there­ banking bill. It is a very important bill. paign because it is fun-they campaign after, morning business until 10 a.m. Senator GARN has put a tremendous because they must-our political with 2 minutes to each Member of the amount of work into it. I have some system requires it. You know their Senate seeking such recognition. At 10 very serious reservations about parts hearts Lord, how difficult it must be o'clock we will resume the pending of the bill, and I hope we can change to concentrate on Senate business business, which is the Baker motion to it. But it is a bill that is absolutely when circumstances at home compete proceed to consideration of S. 2851 vital to our financial community if. we under cloture. From 10 a.m. to 11 a.m. are going to get it passed, and I think for their attention. You know how most Senators, whether they are on great the temptation Lord, to abdicate the time will be controlled by the Sen­ ator from New York [Mr. D'AMA.To]. the Banking Committee or not, are responsibility in the Senate and con­ aware of the very great importance of centrate on the constituency. Thank From 11 a.m. until 11:30, the time will be under the control of Senators GARN that bill. you, gracious God, for public servants Mr. WARNER. Mr. President, if the who refuse to yield to such temptation and PRoXMIRE. At 11:30 a.m.. there will be a vote on the motion to proceed distinguished Senator from Wisconsin and at some political risk fulfill the will yield for a moment, prior to the obligation for which the people sent with S. 2851, the yeas and nays having been ordered. convening of the Senate this morning them to Washington. I was privileged to hear the senior Sovereign Lord, help the people to The leadership has yet to obtain unanimous consent to recess from 12 Senator from Wisconsin [Mr. PRox­ understand the dilemma which our noon to 2 p.m. today. but I anticipate MIRE] mention his observation with re­ system imposes upon incumbent Sena­ that that will be done as is the custom. spect to the vote yesterday. I wonder tors at such a time as this. May the At 2 o'clock we will go back to the if the Senator would be willing to electorate be reminded that though banking bill, S. 2851. share that with our colleagues. I was our system has many problems it is I am told should this matter not be very much impressed by the Senator's still the best in the world. We pray in considered by the Senate today fur­ observations. the name of Him in whom is all power ther, that the majority leader has in Mr. PROXMIRE. Mr. President, I in Heaven and on Earth. Amen. mind television in the Senate, or sever­ have been in the Senate a long time. I al appropriation bills. cannot recall a time when the Senate I am informed that the Labor-HHS so decisively invoked cloture. Usually APPOINTMENT OF ACTING and the Interior matters are available it is fairly close, and most of the time PRESIDENT PRO TEMPORE for floor consideration. when we invoke cloture we do not get The PRESIDING OFFICER. The Mr. President, at this time I yield to it on the first vote. But yesterday, as I clerk will please read a communication the acting minority leader. recall, there were I think 3 votes to the Senate from the President pro The ACTING PRESIDENT pro tem­ against cloture. Perhaps the people tempore [Mr. THuRMoND]. pore. The acting minority leader is rec­ who keep the records can cite an in­ The legislative clerk read the follow­ ognized. stance in the last 27 years when we ing letter: Mr. PROXMIRE. Mr. President, will have had that small of a number. But U.S. SENATE, the distinguished Senator from Virgin­ I cannot remember it. I think what PREsiDENT PRO TEMPORE, ia yield for a question? that means-! hope it means-is that Washington, DC, September 11, 1984. Did the Senator indicate that we the Senate is determined to go ahead To the Senate: would move to another bill? I think he with this bill right or wrong recogniz­ Under the provisions of rule I, section 3, specified television in the Senate in ing that many Senators will vote of the Standing Rules of the Senate, I the event we finish the banking bill or against the bill, and many Senators hereby appoint the Honorable DANIEL J. that we would move off the banking will vote for major changes in the bill, EvANs, a Senator from the State of Wash­ bill at some time. but that the Senators as a whole rec­ ington, to perform the duties of the Chair. Mr. WARNER. Mr. President, I was ognize this is a bill that we should not STROM TlroRM:OND, President pro tempore. simply informed by the majority lead­ permit to be delayed indefinitely. We er's office that in the event it is the only have a few days left, as the Sena­ Mr. EVANS thereupon assumed the decision of the leadership for some tor from Virginia knows. It is a time chair as Acting President pro tempore. reason unknown to me that the bank- that invites delay and filibusters for

e This .. bullet" symbol identifies statements or insertions which are not spoken by the Member on the floor. 24738 CONGRESSIONAL RECORD-SENATE September 11, 1984 those who would kill legislation. But I Religious activities seem especially an outside, ball-park estimate of the earnestly hope it means that the threatening to the Castro regime; ultimate cost. They tell us they will Senate really means business on this thus, the government enforces an ask for $25 billion over the next 5 one. active antireligious policy. years, not to build or deploy a defen­ Mr. WARNER. Mr. President, I Among the restrictions on religious sive system but-just to make a begin­ thank the distinguished Senator from practice enforced by the Cuban Gov­ ning estimate of the costs. We will Wisconsin. I think those observations ernment are discrimination against re­ spend more than $50 billion before we will be of value. ligious believers in educational and buy a single item of hardware for de­ Mr. President, I yield back the bal­ employment opportunities, prohibi­ ance of my time reserved for the ma­ tion on religious media, and restriction ployment, let alone deploy even a frac­ jority leader. on the construction of new churches. tion of the system. We do know the ul­ Political meetings and work obliga­ timate cost of going ahead with the tions are regularly scheduled to con­ full program will be immense. It will RECOGNITION OF THE ACTING flict with religious observances. The be continuing. It will grow very rapidly MINORITY LEADER July 26 national holiday, commemo­ each year. And that growth will be The ACTING PRESIDENT pro tem­ rating the attack on Batista's Mon­ hard, maybe impossible, to resist. As pore. Under the previous order, the cada barracks in 1953, has been pro­ U.S. News & World Report said, the acting minority leader is recognized. moted as a replacement for Christmas, main persuaders for the Congress to Mr. PROXMIRE. Mr. President, I and the availability of toys for chil­ continue to spend money on the pro­ ask unanimous consent that the time dren has been limited to the 26th of gram will not be the defense experts. allocated to the minority leader under July period to the exclusion of Christ­ It will be the firms that would receive the standing order be reserved for his mas. Similarly, Holy Week observ­ hundreds of billions of dollars in con­ use if he chooses to use it later in the ances are preempted by the weeklong tracts, the unions whose members will day. celebration of the battle of the Bay of have hundreds of thousands of jobs, The ACTING PRESIDENT pro tem­ Pigs. and the Members of the House and pore. Without objection, it is so or­ For whatever reason, the Castro Senate who represent these workers. dered. regime does feel threatened by reli­ Star Wars, once we start it, will gious expression. This is a similar fear become the next thing to an irresisti­ CASTRO'S BROKEN PROMISE that was no less real to Hitler's regime ble force. For every big spending pro­ concerning Jews, or Pol Pot's regime gram the Congress has started and Mr. PROXMIRE. Mr. President, in Cambodia concerning the urban ended when it turned out to be waste­ since Fidel Castro led a successful rev­ masses, or the Turks' fear concerning ful, at least a hundred have continued olutionary movement to overthrow the the Armenians during World War I. on their wasteful way. But there is an­ repressive Batista regime in 1959, I am not suggesting that Castro's other reason far more important than Cuba has played a major, controver­ policies constitute genocide, but they its cost that represents the prime sial role in international affairs. may create an environment that is reason why we should not fund it: It Whether it is assisting guerrilla insur­ conducive to the crime of genocide. will kill any real prospect for arms gencies in Central America or sponsor­ That is why I urge the Senate to control. ing 25,000 Cuban troops to support a ratify the longstanding Genocide Con­ On June 20, the Washington Post re­ Marxist regime in Angola, the govern­ vention. This will show our resolve ported that an organization of security ment of Fidel Castro contends that it against any future genocide. And the and arms control experts have started is promoting justice and freedom for United States will send a clear mes­ a national campaign to save arms con­ oppressed people throughout the sage abroad that we will not tolerate, trol and specifically the antiballistic world. from anyone, the act of genocide missile treaty by stopping funding for But in putting Cuba's global activi­ against a whole national, racial, ethnic Star Wars. Mr. President, the compe­ ties into proper perspective, it is im­ or religious group. portant to understand to what extent, tence of this panel should lead every if any, Fidel Castro's government has Senator to question the wisdom of pro­ effectuated meaningful democratic HOW STAR WARS THREATENS ceeding with the beginning of these and social reforms in Cuba and ad­ NUCLEAR ARMS CONTROL colossal appropriations for carrying hered to internationally recognized Mr. PROXMIRE. Mr. President, this the nuclear war into space. The sup­ principles of human rights. The evi­ Congress has advanced the President's porters of the antiballistic missile dence shows that the promises made Strategic Defense Initiative or Star treaty on this panel include two to the Cuban people by the Castro Wars proposals by providing about former Directors of the Central Intel­ government have not been realized. two-thirds of the funds he requested ligence Agency: Stansfield Turner and Moreover, in order to maintain its con­ in the armed services authorization William Colby. trol and power over the Cuban people, bill. Later this year, before we go out, I think all of us have recognized that the Castro government actively en­ presumably, we will have another shot the people who direct the CIA have gages in acts of torture and ha­ at "Star Wars." That will come when the clearest kind of understanding of rassment as well as other drastic steps we vote on the defense appropriations the real threat the Soviet Union repre­ to suppress any activity that might be bill if we do, and I hope we can. A sents to this country. construed as threatening the estab­ great deal will be at stake on this Colby and Turner are hardheaded, lished regime. "Star Wars" antimissile vote. The ulti­ realistic experts on the Soviet Union, Executions to discourage political mate cost of this system will certainly its strength, and its potential. Both dissent, for example, which began b~ in the hundreds of billions and very have had the unparalleled advantage when Castro seized power in 1959, con­ possibly more than $1 trillion. This of directing this country's Central In­ tinue throughout 1984. There are comes at a time when Federal spend­ telligence Agency whose principal task credible reports of summary execu­ ing and colossal Federal deficits con­ is to develop a thorough understand­ tions following secret trials of civilians stitute the single most serious threat ing of the Soviet security threat to for alleged political offenses by mili­ to our economic health. This SDI pro­ this country and every deep and devi­ tary tribunals. A member of Jehovah's gram carries far and away the single ous aspect of that threat. The panel Witnesses, for example was reported biggest and most explosive challenge also includes retired Army Gen. Max­ to have been executed in August 1983 we will face to fiscal responsibility. well Taylor and former Defense Secre­ for allegedly spreading propaganda to Think of it: The strongest advocates tary Robert McNamara, two veteran incite armed rebelllon. of this program will not even give us experts with as profound an under- Septembe,- 11, 1984 CONGRESSIONAL RECORD-SENATE 24739 standing of defense requirements as to provide funds for the new defensive comprised the sample group, and rep­ we have in this country. system that would be partly based in space. resented 12 percent of eighth-grade The campaign's 46 sponsors include students and 10.5 percent of the high The ABM treaty supporters also in­ former President Carter, former secretary clude Gerard Smith, who served Presi­ of state Dean Rusk, former defense secre­ school seniors. dent Nixon as his principal arms con­ tary Robert S. McNamara, retired Army Mr. President, the results of this trol expert and was the chief arms ne­ Gen. Maxwell D. Taylor and former CIA di­ survey are disturbing, at the very gotiator at the time President Nixon rectors Stansfield Turner and William E. least. For example, the majority of signed the ABM treaty. This country Colby. eighth-graders, 67 percent, indicated has no more seasoned or respected If the new strategic defensive system is that they had used alcohol at some arms control expert than Gerard deployed, it will intensify the nuclear arms race with the Soviet Union and lead to dec­ time in their lifetime; 1 out of 4 re­ Smith. And what does Smith say ades of nuclear instability, the group con­ ported having used marijuana at some about the "Star Wars" missile defense tends. time. Almost 3 out of every 10 re­ system? The Post reports that Smith Signed by President Richard M. Nixon spondents indicated that they had is convinced that funding this system and the late Soviet President Leonid I. tried dangerous inhalants; and half will "destroy arms control efforts." Brezhnev, the 1972 ABM treaty bans all the students surveyed said they had The Post quotes Smith as saying: "It space-based ABM systems or any nationwide smoked cigarettes. It was estimated seems we are on a slippery slope. We defense against missile attack. The theory is that the best preventive against nuclear war that as many as 208 eighth-graders are already in an anticipatory breach were in need of intensive treatment kill is the knowledge that it would be mutually of contract." Smith would not all destructive. for problems related to dally use of al­ research on advanced ABM systems. The treaty's supporters say its ratification cohol and/ or marijuana, and another He and the rest of the group that paved the way for all subsequent negotia­ 504 may be "problem drinkers" or would preserve the ABM treaty favor tions aimed at reducing U.S. and Soviet nu­ "smokers" in need of professional such research. They oppose the actual clear arsenals. help. development and deployment of a Gerard C. Smith, the chief U.S. arms ne­ space-based ABM system. Obviously, gotiator at the time the ABM treaty was In describing the amount of usage of such a "breakout" would clearly vio­ signed, said at a news conference at the Car­ inhalants by the students, it was late the 1972 ABM treaty. negie Endowment for International Peace stressed that studies show that sniff­ that he believes-as he did in 1972-that the As a matter of fact, anyone who had ing such substances as gasoline, glue, deployment of an effective, nationwide or industrial solvents can cause irre­ the chance to watch the Star Wars ABM system by one superpower would program on NBC on Saturday night versible brain, liver, and kidney produce irresistible pressure on the other to It heard the Secretary of Defense con­ deploy enough missiles to penetrate it. damage even after a single use. was cede as much. Secretary of Defense That would lead to a tremendously in­ estimated that about 7 million individ­ Weinberger conceded, in a discussion creased arms race that would destroy arms uals have experimented with inhal­ with former Secretary of Defense control efforts, Smith said. "It seems to me ants, most being under 20 years of age; McNamara, that the ABM treaty we are on a slippery slope," he said. "We are 27 percent of the students surveyed in would undoubtedly be violated. But he already in an anticipatory breach of con­ this Pinellas County study reported said the conditions have changed, as if tract." having used inhalants at some time, Smith, a former director of the Arms Con­ and an additional 15 percent said they that was the reason to do so. trol and Disarmament Agency, said the So the Congress must handle this re­ group leading the new campaign favors con­ expected to use inhalants within the search very carefully and with scrupu­ tinuing research on advanced ABM systems next year. lous regard for the terms of the ABM as a hedge against a possible Soviet "break­ Study of the attitude of these stu­ treaty. We must also find the strength out" from the terms of the 1972 accord. dents toward substance abuse revealed to resist the immense pressures that "What we are objecting to is an American a liberality indicating an astounding the hundreds of millions we spend on breakout," by the actual development and ignorance of the dangers of drugs and research will put on the Congress to deployment of a space-based ABM system. alcohol; 8 out of every 10 students in­ move to the first development that he said. dicated approval of alcohol use; over would put this country in violation of half the students reported that they the antiballistic missile treaty. We are ROUTINE MORNING BUSINESS approved of marijuana use; and 4 out a few inches from the "slippery slope" The ACTING PRESIDENT pro tem­ of 10 students cited approval of having to which Gerard Smith referred. Once pore. Under the previous order, there five or more drinks on the weekend. It we slip over the slope and begin to de­ will now be a period for the transac­ was found that as many as 8 percent velop antimissiles, the antiballistic tion of routine morning business not of the students used marijuana on a missile treaty will be dead. And effec­ to extend beyond the hour of 10 a.m. daily or weekly basis; and almost 13 tive arms control with the Soviet with statements limited therein to 2 percent of the students surveyed indi­ Union will be a terminal case. minutes each. cated they had been drunk more than Mr. President, I ask unanimous con­ three times in the 2 weeks prior to the sent that the article from the Wash­ survey. ington Post of June 20, headlined: OPERATION PAR, INC. Mr. President, these and the other "U.S. Close to Violating ABM Treaty, Mrs. HAWKINS. Mr. President, a statistics provided in this study are, as Panel of Security Specialists Says," be very impressive, thorough, and dis­ I said, disturbing, but it becomes even printed at this point in the RECORD. turbing, research study was recently more upsetting with the final conclu­ There being no objection, the article released by an organization in my sion of the study. And this is that the was ordered to be printed in the home State of Florida known as Oper­ Pinellas County youth observed in this RECoRD, as follows: ation PAR, Inc. study are statistically less approving [From the Washington Post, June 20, 19841 In "Substance Abuse Among Pinel­ of substance use than the national av­ U.S. CLoSE TO VIOLATING ABM TREATY, las County Youth: A Summary of erage, and less exposed than the na­ PANEL OF SECURITY SPECIALISTS SAYS Findings," Operation PAR, Inc., re­ tional average. By pushing development of its "Star veals simply, clearly, and shockingly, Mr. President, we must continue in Wars" missile defense system, the Reagan the amount of substance abuse which our efforts to educate our young administration is close to a clear U.S. viola­ occurs in the middle and high schools people to the dangers of drug and al­ tion of the 1972 ant1-ball1st1c missile treaty, a panel of security and arms control of a typical American school system. cohol abuse. Our children are begin­ specialists sald yesterday. This is the second of two surveys of ning to experiment with drugs at a The panel is beginning what lt calls a "na­ drug use among Pinellas County younger age, are using drugs more tional campaign to save the ABM treaty" by youths, the first having been conduct­ often, and are ingesting a wider varie­ attempting to persuade Congress to refuse ed in June 1980. Over 1,500 students ty of drugs. We must continue to do 24740 CONGRESSIONAL RECORD-SENATE September 11, 1984 all we can to prevent our young people The bill clerk proceeded to call the Are we really going to make New from becoming victims of our Nation's roll. York stand for badness through legis­ No. 1 problem, substance abuse. And I Mr. D'AMATO. Mr. President, I ask lation? We should not. How can Sena­ would like to commend Operation unanimous consent that the order for tors do this and still say they protect PAR, Inc., for this fine study which the quorum call be rescinded. the Constitution. But while doing this will contribute much to these efforts. The PRESIDING OFFICER

a1 -oss o-87 -s iPt. 18> 24746 CONGRESSIONAL RECORD-SENATE September 11, 1981, thority for depository institutions will underwriting municipal revenue mortgage backed securities market ex­ bring new competition to this highly bonds. The support of the Board of pands. We must permit depository in­ concentrated market and, thereby, Governors of the Federal Reserve, the stitution securities affiliates to engage lower financing costs for States and Comptroller of the Currency, and in this vital activity which will do so local governments. FDIC for this power further evidence much to generate more mortgage cap­ I repeat what I said earlier today: that this is not a safety and soundness ital in the coming years of high the National League of Cities. the U.S. issue. demand. Conference of Mayors, the National Allowing depository institution secu­ Association of Counties, all the local rities affiliates to underwrite all types COIDIERCIAL PAPER municipal and county governments of of revenue bonds will save millions of Commercial paper is a term which the country support these new author­ dollars for cities and States and. most describes the short-term debt obliga­ ity for depository institutions because important, users of airports, highways, tions corporations issue to generate they believe the result will be lower and other public facilities. The munici­ operating cash. It is functionally iden­ cost of government in their local juris­ pal bond underwriting market is heavi­ tical to a commercial bank loan, but dictions. ly concentrated. In 1982, the top 10 the default rate has historically been This is accomplished through a very revenue bond underwriters, all of only a small percentage of that for modest expansion of the activities that which were securities broker1 dealers, commercial loans. Underwriting and depository institutions are permitted controlled nearly 50 percent of the distributing such instruments involves to engage in. Banks already under­ market. minimal risks. write and deal in general obligation We constantly hear about the fear The commercial paper underwriting bonds. Thus, they already have the in­ of concentrations, that we cannot market is very concentrated among se­ house expertise to perform the same allow the 10 biggest banks in this curities brokerI dealers: Seven invest­ activities in the closely related revenue country to control whatever they are ment banking firms currently act as bond marketplace. Equally important, supposed to control. But we fail to rec­ agents for over 85 percent of the cor­ underwriting and dealing in revenue ognize that the concentrations can porations which issue commercial bonds will not expose depository insti­ occur in other parts of the financial paper through an agent. Permitting tutions to any new type of risk. services industry as well. depository institution securities affili­ At the time of passage of the Glass-. So, I repeat: The municipal bond un­ ates to compete in this vital part of Steagall Act, municipal revenue bonds derwriting market is heavily concen­ our capital market, which is increasing were virtually· unknown. Yet, because trated. In 1982, the top 10 revenue more rapidly than the commercial of this accident of history. banks pres­ bond underwriters, all of which were loan market, is an effective manner of ently are prohibited from dealing in securities broker/dealers, controlled ensuring the continued participation these bonds, although they are just as nearly 50 percent of the market. In of depository institution organizations safe as general obligation bonds, and comparison, the top 10 general obliga­ in serving the short-term credit needs today constitute three-quarters of the tion underwriters, both banks and se­ of American businesses. total tax-exempt bond market. It is no curities firms, controlled only 29 per­ coincidence that the industries that cent of that underwriting market-a AMENDMENTS have opposed expanded bank powers great deal more competition. More­ During the Banking Committee's are the same people who today control over, the trend is toward more concen­ markup, two amendments were adopt­ this market. They do not want the tration in the revenue bond market, ed dealing with mutual fund authority competition. while the general obligation market is and insuranee authority. Who are the people who would becoming less concentrated. Increased The mutual fund amendment delet­ really be helped by giving banks this competition in the revenue bond ed authority for depository institution authority? Municipal revenue bond au­ market would result in reduced under­ securities affiliates to operate mutual thority for bank securities affiliates writing fees and improved services for funds. has been endorsed by the National public issuers. The insurance amendment applied Governors Association, the Municipal As a former mayor, I am especially title VI of the Gam-St Germain Fi­ Finance Officers Association. the U.S. aware of local financing needs and op­ nancial Institutions Act of 1982 to all Conference of Mayors, the National erations. After having served on the subsidiaries of bank holding compa­ League of Cities, the National Associa­ Banking Committee for almost 10 nies. I remain concerned over the tion of Counties, the American Public years, I am more convinced than ever impact of this amendment on States Power Association, and many other that Congress should authorize deposi­ rights and the dual banking system. municipal and State associations-vir­ tory institution securities affiliates to NONBANK BANKS tually everyone who has an interest in underwrite and deal in all types of mu­ S. 2851 preserves the coverage of the low-cost finance. Only those who have nicipal revenue bonds. Bank Holding Company Act by rede­ a comer on the market-three-fourths MORTGAGE BACKED SECURITIES fining the term "bank" under the act of the bond market of this country­ One of the clearest and most impor­ to cover all FDIC-insured institutions. are opposed to granting this new au­ tant needs that faces our Nation in By grandfathering "nonbank bank" thority. the next decade and beyond is meeting acquisitions occurring before July 1. Congress already has approved bank the huge demand for mortgage capital 1983, the bill recognizes that these underwriting of certain municipal rev­ that all experts project. Estimates are early acquisitions were made in good enue bonds, such as those issued by that we will need $1.5 trillion to fi­ faith before Congress expressed a TVA, the Asian Development Bank, nance housing in the next decade and clear intention to redefine the term the Washington Metropolitan Area up to $4 trillion by the end of the cen­ "bank.'' Transportation Authority, and various tury, and that one-half to three­ This liberal grandfathering is possi­ housing, health care, university, and fourths of those mortgages will be fi­ ble because there have been no exam­ dormitory projects. nanced through securities backed by ples of the misuse of "nonbank This was not because those issues pools of mortgages. Presently, three banks." Liberal grandfathering also is were safer, but because Congress was federally chartered entitles-FNMA, possible only because the modest ex­ especially aware of the need to hold GNMA, and FHLMC-issue 95 percent panison of permissible activities for down underwriters' fees on those of the mortgage-backed securities in depository institutions in S. 2851 projects. The same analysis applies to the secondary market. That ratio, moves in the direction of lessening all municipal revenue bonds, and S. however, very likely will be changed their competitive disadvantages vis-a­ 2851 merely fixes the historical anom­ by the end of this decade as the re­ vis the diversified providers of finan­ aly which has prevented banks from cently developed. privately-issued cial services. September 11, 1984 CONGRESSIONAL RECORD-SENATE 24747 CONCLUSION the business of banking and other keeping banks in banking is to keep Mr. President, I repeat that our fi­ lines of commercial and financial en­ other businesses out of banking. Sepa­ nancial system is going through a deavor. They were enacted in previous ration of function is a two-way street. transition, that measured changes in Congresses in order to promote safe It makes no sense to confine banks to our national policy on financial serv­ banking, prevent conflicts of interest a limited range of activities while per­ ices are needed, and that S. 2851 is the and unfair competition, and avoid an mitting unregulated entities to offer appropriate legislative response to the undue concentration of economic products and services unique to bank­ most pressing issues confronting our power. These objectives were valid ing. For that reason. Congress has also depository institutions. when they were first enacted into law made it illegal for nonbanking firms to The few, limited expansions of ac­ and they remain valid today. own banks or to offer products unique tivities authorized by the bill are a Mr. President, I think that very few to banking such as checking accounts. measured, but essential, step toward Senators and very few people reflect Many people wonder why we should competitive equity and better, more on the fact that we have a unique have this separation. But I think if efficient financial services for consum­ banking system in this country. you reflect on it a minute, consider for ers and businesses. Almost every other country in the instance a firm in the business of leas­ Mr. PROXMIRE. Mr. President, the world has a concentration of banking ing automobiles. For that firm the Financial Services Competitive Equity in very few institutions, whether it is most important single ingredient is Act, S. 2851, is a constructive attempt Canada or England or France or Italy access to credit. If it can get credit at by the committee to close some of the or Japan. These countries will have more gaping loopholes in our banking five, six, or seven banks that do about good terms, it can beat the competi­ laws while providing bank institutions 90 percent of the business. That is not tion. Suppose the bank comes along with limited new securities powers. true in this country. We have 15,000 and gets in the business through a The most damaging loophole closed is banks. While our big banks do a big holding company and buys a competi­ the so-called nonbank bank loophole share of business, the fact is that the tive auto leaser. How would you like to which has undermined the separation 10 biggest banks do not do the 90 per­ be in business against a competitor of banking from other businesses cent as they do in other countries or who had all the capital they want and while paving the way for unrestricted 95 percent; they do only 30 percent of had it, furthermore. on the basis interstate banking. The bill also plugs the business. where it was a competitor who gets the so-ealled South Dakota loophole We have a really diversified locally the capital at more favorable terms by restricting the ability of States to owned financial system. The great ad­ than you could? Obviously it would be authorize insurance powers for bank vantage of that, of course, is that a very unfair situation, and the bank holding companies beyond those avail­ people who live in a community know would be able to run out of business able in the Bank Holding Company the community, go to school with the any competitor who wanted to get into Act. Finally, the bill closes the loop­ people who are their customers, un­ the field. hole in the Glass-Steagall Act which derstand their character, understand This is true of almost any business allows State chartered banks not much more than you get in any kind which relies heavily on credit. And, of members of the Federal Reserve of a system where you rely simply on course, many of our businesses do, and System to engage in the securities the numbers, run our financial system, that is why we would have a much less business. and I think that is a big reason why fairer system, much less competitive Incidentally. so much of the protest the U.S. economy over the years has system if we permitted banks to get against this bill centered on the securi­ been so productive and so efficient and into real estate and get into some of ties people. That particular provision, has been ahead of the economies in these other areas that they are so anx­ it seems to me, should be more impor­ other countries. ious to get into. tant to them than the new powers That is one of the elements that has In addition to limiting the activities that we have which they are so vigor­ been overlooked but I think that this of banks, Congress has also limited the ously protesting. bill tries very, very hard to preserve. ability of banks to branch across State Most banking bills are the product There has been a tendency for the lines. The Bank Holding Company Act of compromise, and S. 2851 is no ex­ very big banks to move into other prohibits the ownership of banks out­ ception. The committee had to balance areas to get much bigger, swallow up side the State where the holding com­ the drive for further banking deregu­ other banks, and this is an attempt on pany is based unless specifically per­ lation against the need to maintain a the part of the committee to provide mitted under the law of the targeted safe and sound banking system. The the kind of diversification, the kind of State. As a result of these prohibi­ benefits of more deregulation had to widespread ownership, and to prevent tions, the banking system of the be weighed against the potential costs the kind of concentration and conflict United States is more decentralized of undue concentration or conflicts of of interest which threatens and could than any major country, and I already interest. Difficult choices had to be threaten our banking system. indicated the statistics on that. In made on what services were to be al­ In establishing our financial frame­ most advanced industrial countries, lowed bank holding companies and in work, Congress has traditionally the top 10 banks have upward of 90 some cases decisions were reached looked upon banks as unique institu­ percent of banking deposits; in the only by a close vote. tions broadly affected with a public United States, the top 10 banks have By and large, the bill reported by purpose. This is because banks are the less than 30 percent of bank deposits. the committee is a conservative ap­ dominant supplier of short-term busi­ A decentralized banking system pro­ proach to financial restructuring. The ness credit, the major source of motes not only greater competition committee rejected the sweeping de­ backup liquidity for our economy, the but also more local control over local regulation proposals of the Reagan ad­ custodians of the Nation's payment credit decisions. With over 14,000 ministration which would have al­ system, and the principal transmission banks in our country, most borrowers lowed bank holding companies to belt for our Nation's monetary policy. can have access to a locally owned and engage in a wide variety of real estate, Because of the unique and crucial controlled bank to meet their credit insurance, and other financial services. role played by banks in our economy, needs. If we were to convert to a Instead, the committee essentially Congress has sought to limit their ac­ highly concentrated European bank­ reaffirmed the major objectives of our tivities so that they can carry on their ing structure, most of the credit deci­ current banking laws as embodied in important functions with objectivity sions affecting our local economies the Bank Holding Company Act and and impartiality and thus ensure safe would be made in New York, Chicago, the Glass-Steagall Act. These laws and sound banking practices. Of and a few other financial money cen­ seek to enforce a separation between course, the corollary of a policy of ters. 24748 CONGRESSIONAL RECORD-SENATE September 11, 1981, The congressional policy of main­ framework regulating banking estab­ rities did not extend to underwriting taining a separate and decentralized lished by Congress in favor of their municipal bonds. As a result, banks banking system has come under attack own views on how the financial serv­ have continued to underwrite general from three fronts. First, attorneys ices industry should be structured. For obligation bonds of State and local have shown remarkable ingenuity in example, the FDIC recently declared governments during the last 50 years discovering and expanding upon loop­ that the 50-year-old Glass-Steagall Act with no documented instances of holes in our present banking laws in prohibition separating banking from abuse. order to circumvent existing legal re­ the securities business should no Unfortunately, in providing an ex­ strictions. The "nonbank bank" is a longer apply to State-chartered banks ception for general obligation bonds, classic example. Under the Bank Hold­ that are not members of the Federal ing Company Act, an institution is not Reserve System. The Comptroller of the Congress failed to distinguish be­ a bank unless it both makes commer­ the Currency aided and abetted the tween these bonds and municipal reve­ cial loans and accepts demand depos­ development of the nonbank bank nue bonds which, in 1933, were a its. If it forgoes one of these two serv­ loophole through "creative" interpre­ seldom used means of municipal fi­ ices, it is not a bank for Bank Holding tations of Federal law. The Federal nance. A general obligation bond is Company Act purposes even though it Reserve, whose members are generally backed by the full faith and credit of may have been chartered as a bank not bankers, has been the only agency the State whereas a revenue bond is under State or Federal law. that seems to give any deference to backed by the revenues from a specific If a bank wants to avoid tbe restric­ the laws passed by the Congress. project such as bridge tolls. Today, tions of the Bank Holding Company The third challenge to congressional revenue bonds account for more than Act, it can simply convert all of its banking policy has come from some half the volume of municipal financ­ demand deposits to NOW accounts States which have come to look upon ing although banks by law are preclud­ and turn itself into a "nonbank bank." their banking laws as instruments of ed from competing. Studies over the It can then be owned by any company economic development to be rede­ years have indicated that the cost of no matter how far removed its busi­ signed simply to lure a few hundred issuing municipal revenue bonds could ness may be from banking. Similarly, clerical jobs into a State. For example, be reduced if banks were allowed to existing bank holding companies can in early 1983, South Dakota amended compete directly with investment evade restrictions on interstate bank­ its banking laws to permit its State­ banking firms as they do in the gener­ ing by purchasing or establishing non­ chartered banks to engage in virtually al obligation bond market. bank banks across State lines irrespec­ any kind of insurance activity. In Because investment banking firms tive of State law. Or a bank that wants doing so it carefully provided that have a monopoly on revenue bond un­ to get into exotic new activities not these insurance activities could not be derwriting, there is considerable eco­ permitted to banks or bank holding performed inside the State if they nomic concentration in this market companies can turn itself into a non­ would adversely affect insurance com­ which translates into less competition bank, form a holding company, and panies or agents operating within the and higher borrowing costs for State engage in the forbidden activities State. But no such restrictions are ap­ and local governments. The 10 leading through a separate subsidiary of the plied to operations outside the State. underwriters of revenue bonds-all of holding company. Shortly after the South Dakota law which are investment banking firms­ In short, the nonbank bank loophole was passed, Citicorp, the Nation's larg­ accounted for 49 percent of the makes a shambles of the Bank Hold­ est bank holding company, applied to market in 1982. By way of contrast, ing Company Act. There are now hun­ buy a South Dakota bank with the the 10 leading underwriters of general dreds of applications for nonbank intent of using that bank to engage in obligation bonds-where commercial banks awaiting approval by the Feder­ a nationwide insurance business. banks can compete-accounted for al bank regulators. Most of these are While South Dakota may gain a few only 29 percent of the market. More­ from giant, money center banks seek­ hundred banking jobs, the congres­ over, the revenue bond market is be­ ing to establish nonbank banks in sional policy of keeping banking and coming more concentrated over time other States. The Comptroller of the insurance separate was undermined. whereas just the opposite is true of Currency, an ardent proponent of In effect, South Dakota determined the general obligation bond market. interstate banking, has vowed he will banking policy for the other 49 States Since bank underwriting of revenue approve most of these applications while insulating itself from the conse­ bonds will lower State and local bor­ unless Congress acts to prevent it. quences of its own actions. rowing costs, State and local organiza­ Thus, if Congress does not close the While S. 2851 reaffirms current nonbank bank loophole, our decentral­ banking policy as established by Con­ tions strongly support the committee's ized banking system can be radically gress, it nonetheless does provide bank action. These include the Government transformed almost overnight. holding companies with limited new Finance Officers Association, the Na­ A second challenge to congressional securities powers. In particular, it tional League of Cities, the National banking policy has come from the Fed­ would allow bank holding companies Governors Association, the National eral bank regulators themselves. One to underwrite and deal in municipal Conference of State Legislatures, the of the shortcomings of our bank regu­ revenue bonds and mortgage backed National Association of Counties, and latory system stems from the fact that securities. There is no credible evi­ the U.S. Conference of Mayors. the regulators are often drawn from dence that the basic objectives of the The other new power authorized for and return to the banking community. Bank Holding Company Act or the bank holding companies is to under­ As a result, regulators tend to view re­ Glass-Steagall Act would be threat­ write and deal in mortgage backed se­ strictions on banks more from the per­ ened if bank holding companies were curities. A mortgage backed security is spective of bankers-that is, as obsta­ authorized to exercise these two limit­ a bond-type instrument secured by a cles to "progress" where progress is de­ ed powers. pool of conventional mortgage loans. fined as an ever expanding empire for With respect to underwriting munic­ These new instruments have been de­ the banking business. Efforts to re­ ipal revenue bonds, it should be noted veloped in the private sector as a way strict banks are not seen as legitimate that when Congress passed the origi­ of enhancing the flow of funds into objectives of public policy but rather nal Glass-Steagall Act in 1933, it spe­ residential mortgage investments. as the efforts of selfish industries to cifically allowed banks to continue un­ While banks can issue mortgage protect themselves from bank compe­ derwriting general obligation bonds of backed securities as originating mort­ tition. State and local govenunents. The Con­ gage lenders, they are precluded by Given this mindset, bank regulators gress determined that the abuses in­ law from selling them to the ultimate have often ignored the statutory volved in underwriting corporate secu- investor. September 11, 1981,. CONGRESSIONAL RECORD-SENATE 24749 As in the case of revenue bonds, the the Senate a long time-27 years. I to qualified thrift leaders to golden market for mortgage backed securities have been on the Banking Committee parachutes. But its core provisions, in will be strengthened if banks are al­ every 1 of those 27 years. I have served my view, are the ones aimed at restor­ lowed to compete with investment as chairman of that committee for 6 ing the integrity of our financial banking firms. The ultimate benefici­ years and as ranking member for 4 policy framework. ary will be the American home buyer years. I do not think I have ever seen a Banks and other depository institu­ whose borrowing costs will be reduced. more diligent or nearly as diligent a tions play a unique and critical role in For these reasons, this provision of chairman as we have now. He has our economic system. They provide a the bill is supported by the National worked extraordinarily hard, has reliable payments system. They fur­ Association of Homebuilders and the broken all records as far as the com­ nish a secure repository for liquid sav­ National Association of Realtors. mittee is concerned in the time that ings. They aggregate funds and serve Mr. President, notwithstanding the he has devoted to this bill-endless substantial benefits of S. 2851, in my days of hearings over a period of 15 as impartial allocators of credit. And view it must still be regarded as a months, 4,500 pages of testimony, 72 they operate as the transmission belt flawed product. It encourages the witnesses. As we all know, we have a for monetary policy, linking actions by merging of bank and thrift industries complicated as well as a diversified fi­ the central bank to the real economic that may not be in the best interests nancial system, and the chairman of factors they are intended to influence. of a strong home-financing system. I the committee, I think, has done a su­ For this reason, changes affecting think that is unfortunate because the perlative job under tough circum­ the function of these institutions and thrift industries have their function stances. their relationships to the broader fi­ and if we are going to be able to fi­ Although, as I have indicated, I do nancial and economic system raise nance homebuilding and individual disagree with him on many of the im­ fundamental public policy issues. They home purchases we found that in the portant issues, nevertheless he has put are not merely matters of private in­ past it is necessary to have strong in­ together a bill which I will enthusi­ terest to the financial service industry dependent home financing industries astically support and which I think per se. and the thrift industry has had that merits the support of the Senate. Established policy in this area has, function. And this bill unfortunately, I think we should be very sensitive for more than half a century, drawn as I say, encourages a merging of the to the fact that our economic system certain distinctions among different banking and thrift industries and in and our banking system could get into types of financial institutions and be­ that sense may threaten the ability of difficulty. The fact is that we have tween the financial sector and the homebuilders and home buyers gener­ had failures over the past few years larger economy. If these boundaries ally to get the kind of financing they and the failures of this past year, as I are to be altered, the change should need in the future. indicated yesterday, are greater than come as a result of a conscious policy Also it promotes regional interstate they have been at any time in the last decision by the Congress. We should banking in a way that sacrifices local 50 years. We have to be very careful not stand by and allow existing policy control over banking without maximiz­ about ensuring the safety and sound­ to be rewritten willy-nilly by clever ing competition. ness of our banks. This legislation will lawyers, novel technologies, and com­ I think that is an important matter help greatly in moving, in my judg­ plaisant regulators. If the structure of that I hope we can amend and change ment, in this direction and away from our financial system needs to be re­ because, as I say, the unique distinc­ a very dangerous tendency for our aligned, then it is up to the Congress, tive element of American banking is banks to get into difficulty. which is collectively supposed to rep­ its local control, and I come at this re­ Mr. President, I yield the floor. resent the public, to decide what new gional problem from the opposite way Mr. GARN. Mr. President, first let arrangements will better serve our that the distinguished Senator from me thank my distinguished colleague needs as a nation. The near collapse of New York has. Whereas he favors, as I from Wisconsin for his overly gener­ and the trouble understand it, nationwide branching, I ous remarks. I will read them to my surrounding the Financial Corpora­ feel that we should confine branching children tonight and make them feel tion of America suggest a cautious ap­ to, as we have in the past, by and very proud. They are not deserved, but proach in this regard. large, to individual States so that we I appreciate them anyway. This bill, Mr. President, may not be encourage individual local ownership. I would add that I had 6 years to Finally, Mr. President, the most seri­ watch the former chairman at work, perfect. Products of the give-and-take ous weakness in the bill and one that I so I tried to listen and observe during of the legislative mill seldom are. And do hope that the Senate will reform is those years and learn from his exam­ it is admittedly controversial in some it hands large banks a $4 billion bo­ ple. respects. But it is, in my judgment, a nanza, $4 billion over 6 years at the e Mr. LAUTENBERG. Mr. President, necessary step in the right direction. expense of the U.S. Treasury. I rise in support of the pending bill. Its central provisions begin the task of I think that is a serious, serious mis­ The Financial Services Competitive reestablishing a stable and consistent take, particularly at a time when we Equity Act, S. 2851, is the product of 2 statutory framework for the regula­ have a very unfortunate problem. I years of hard work, extensive hear­ tion of the core institutions of our fi­ think the most damaging problem ings, and vigorous debate in the nancial system. with respect to our economy is the size Senate Banking, Housing, and Urban It significantly narrows, if it does of the deficit and the size of the na­ Affairs Committee. not absolutely close, the nonbank tional debt and the growing size of the On balance, I believe the result is a bank loophole which has been exploit­ debt and this, of course, would in­ reasonably balanced measure that will ed to evade the restriction on both ac­ crease the debt at a rate of $4 billion promote greater rationality and con­ tivities and branching in the Bank over 6 years and at an increasing rate sistency in the regulation of the finan­ Holding Company Act. as time goes on. cial sector. In a larger sense, of course, It closes the "South Dakota.. loop­ So I am hopeful some of these flaws it is the latest installment in the con­ hole through which bank holding com­ can be corrected as the Senate pro­ tinuing effort to adjust financial panies have sought to exploit State ceeds to debate the legislation. policy to a rapidly changing environ­ regulatory laxity to acquire powers Mr. President, in closing, I would ment. denied them under Federal law. like to commend our chairman's lead­ S. 2851, Mr. President, is a compli­ It closes the "nonmember bank.. ership. I did that the other day, but I cated piece of legislation. It deals with loophole which would have permitted think it is well worth while emphasiz­ a broad range of complex and even State banks not belonging to the Fed­ ing once again. As I say, I have been in arcane subjects, from nonbank banks eral Reserve to engage in investment 24750 CONGRESSIONAL RECORD-SENATE September 11, 1984 banking contrary to long established banks in other States on a nationwide BENEFITS OF REGIONALLY RECIPROCAL BANKING policy principles. basis. Two other States allow their STATUTES It imposes a residential lending test banks to be purchased without restric­ Those States enacting and consider­ on unitary thrift holding companies, tion. ing regional banking laws are acting which helps to assure that thrifts Such actions represent the healthy on the conviction that the regionally owned by nonfinancial parents contin­ diversity found in our dual banking reciprocal banking statute option ue to maintain their commitment to system. Unfortunately, the basic right serves important economic develop­ housing finance. of each State to determine the nature ment and policy concerns. These It expands the securities activities of the banking system within its bor­ States anticipate benefits to consum­ permissible to bank holding companies ders is being challenged by a few large ers, to businesses, and to bank share­ to include municipal revenue bonds, holders. These benefits are to be mortgage backed securities, commer­ banks in a single State which would achieved within the context of the Na­ cial paper, and discount brokerage. impose their will on the entire bank­ tion's historic policy supporting State The latter two have already been ap­ ing system. Already, these banking control of banking resources. Regional proved by regulation. It authorizes re­ giants, with their vast resources, have banking is expected to act as an engine gional interstate banking agreements waged a titantic struggle. for regional economic development, for an experimental 5-year period. They have sought to have the Feder­ with stronger regional financial insti­ Taken together, these reforms go a al Reserve Board deny mergers based tutions providing an inducement for long way toward addressing the imbal­ on the regionally reciprocal State growth and relocation, for jobs and de­ ances, inequities, and uncertainties banking statutes which these banks velopment. that have developed in the financial oppose. The Federal Reserve Board This is an experiment. The results sector over the past several years. has found the laws on which such are not yet in, nor will they be for To be sure, S. 2851is no panacea for mergers are based are indeed compati­ some time. The various State laws en­ all the strains and problems in our fi­ ble with the Douglas amendment; four acted so far are different in many nancial system. But it is sound legisla­ such mergers have been approved in ways-in the method of entry permit­ tion that is responsive to some of the New England. A few banking giants ted, in the timeframe under which the more serious problems we face in fi­ have sought to have Federal district law is effective, and even in the State's nancial policy and I hope my col­ and circuit courts find that regionally definition of a "region." One would leagues will support it. reciprocal State banking statutes are not expect less in an experiment. In conclusion, Mr. President. I would be remiss if I did not acknowledge the unconstitutional; however, these stat­ STATE CONTROL OF BANKING RESOURCES hard work and effective leadership of utes have been upheld at every level. The United States has a history of both the distinguished chairman, Sen­ But still the bank giants continue two centuries of populist concern ator GARN, and the able ranking their struggle. They are now appealing about large financial institutions. Over member, Senator PRoXMIRE. Both their case to the Supreme Court, an the years, people have worried about have exhibited that rare blend of per­ action sorely testing the limited re­ how interstate banking might affect severance, tact, and flexibility which is sources of the regional banks against the concentration of political and eco­ indispensable to legislative success. whom the action is being brought. nomic power, the distribution of They are to be commended for Why then should Congress become in­ credit, the capital adequacy, safety, moving a bill which is so complicated volved in this process? and soundness of our financial struc­ and touches on so many contentious Congress has become involved in ture, and the role of the dual banking issues. The Senate owes them a debt order to clarify the intent of the legis­ system. of gratitude.e lation it passed nearly 30 years ago The bedrock of our diverse regional TITLE X OF S. 285 and to prevent further disruption to structure, our banking system that Mr. MATI'INGLY. Mr. President, I the banking system being caused by conforms to that structure, and our wish to commend my colleagues and this unnecessary litigation. Four bank desire to minimize centralized control chairman of the Committee on Bank­ mergers are pending in New England, over the Nation's financial resources is ing, Housing, and Urban Mfalrs, the having been stayed pending the out­ American policy maintaining State Honorable JAKE GARN, for including come of the ongoing litigation. An­ control of banking structure. The prin­ title X in S. 2851. Title X was intro­ ciples embodied in current Federal other merger has been announced be­ banking law recognize that the indi­ duced in the Senate by me originally tween a Florida and a Georgia bank as S. 2113, and was incorporated into vidual States can best decide such con­ holding company. These and other structive issues. States continually Chairman GARN's deregulation pack­ strategic plans have been put on hold age which is now being considered by have liberalized limitations on geo­ indefinitely causing needless uncer­ graphic expansion by commercial this body. tainty in the quickly changing finan- I introduced S. 2213 in order to clari­ banks and bank holding companies, cial services industry. • even across State lines, and they will fy the intent of Congress when it en­ By acting now to approve a banking acted section 3(d) of the Bank Holding continue to do so. But each one acts Company Act of 1956. Popularly bill containing title X, this body would when it is in the best interest of its known as the Douglas amendment, be alleviating the uncertainty in citizens to do so. To imply that one ap­ this provision of Federal banking law future planning now present in the 40 proach is optimal for all 50 States is to provides that bank holding companies States which have or are considering ignore the existence of our decentral­ headquartered in one State may not regionally reciprocal banking legisla­ ized economic and political heritage. cross the borders of another State tion. Without action now, in this ses­ Regional banking maintains the fun­ unless specifically authorized to do so sion, we will be allowing a few banks damental public policy of State con­ by that State. with the most resources to dictate the trol of banking structure. Enactment To date, nine States (including my nature of the banking system in 49 of a congressional sanction for the home State of Georgia) have acted to other States. This should not be al­ option to enact regionally reciprocal allow banks from other States in legis­ lowed to happen. banking statutes reaffirms the Con­ latively-defined regions to cross State The clarification of Federal banking gress support for this policy. borders for banking purposes, provid­ law brought by the enactment of title CONSUMER BENEFI TS ed the States granted such a privilege X would be to the benefit of the Research evidence has indicated provide reciprocal treatment to banks economies and residents of each of the that the qualit y and quantities of serv­ from the granting State. Another regions in which regionally banking ices provided by banks are enhanced State provides reciprocal treatment to statutes are enacted. whenever banking expansion is per- September 11, 1984 CONGRESSIONAL RECORD-SENATE 24751 mitted. The availabutty of credit to lo­ CONCENTRATION Thus. current law and basic banking cally limited consumers is also in­ Whereas competition is generally practicalities help to ensure that, even creased due to the entry of banks with evaluated on the local level, concentra­ under regional banking, the U.S. bank­ more funds available for lending. tion is generally looked at from both a ing system will remain the least con­ With greater resources available to local and national perspective. On the centrated of any major nation. them, banks can capitalize on their national level, numerous factors are at There are over 14.000 banks in this size by achieving economics of scale in work ensuring that regionally recipro­ country; some 90 percent of these are the money markets, thereby reducing cal State banking statutes do not lead community banks with assets of less the banks' cost of funds. As deregula­ to undesired amounts of concentration than $100 million. California provides tion of interest rates paid to consum­ in the banking industry. Three of a good example of very large banks ers continues, this will become increas­ these factors are: sharing a market with many small ingly important in order to provide First. bank holding companies banks and thrifts. This coexistence of consumers with the highest return expand with a particular local market many small banks with larger regional possible on their savings. Greater size in mind. However, there are only a and money center banks confirms the also permits regional banks to more limited number of potentially attrac­ ability of these small firms to exist in easily and efficiently add new products tive banking markets-markets in highly competitive markets. from which consumers will benefit. which the expanding bank can operate According to a Federal Reserve Thus, regional banking will bring ben­ profitably. If all of those banks consid­ Board study published in the Federal efits to consumers in the form of ering expansion aim at the same at­ Reserve Bulletin in February 1982, more, better, and competitively priced tractive markets. many banks wlll be concentration of banking resources de­ banking products and services. Addi­ priced out of the market. Making a clined between 1969 and 1980. At the tionally, regional banking gives con­ profit when paying a substantial pre­ national level, for example, the pro­ sumer,s peace of mind, knowing that mium for a bank would be difficult. In portion of domestic deposits held by their deposits are remaining in the the same way. a rash of de novo entry the 10 largest banking organizations region, to help foster the region's de­ would increase competition and reduce fell from 20.2 percent in December velopment. profitability. 1969 to 17.9 percent in December 1980. Second, bank holding companies are The same trend of decreasing concen­ BENEFITS TO BUSINESS constrained as well by their own inter­ tration was found using Standard Met­ The regional banking option will nal limitations. De novo banks require ropolitan Statistical Areas to approxi­ provide economic benefits to business significant new capital. and acquisi­ mate local banking markets. firms. particularly small businesses. tions based on stock exchanges are Other financial industries are con­ Basic economic similarities among based on the capital markets valuation siderably more concentrated than groups of States could provide eco­ of the stock involved. When coupled commercial banking. For example, in nomic efficiencies from limited inter­ with a limited supply of the manage­ the securities brokerage industry, 16 state banking. The bank serving man­ ment talent needed when forming a percent of the firms account for 92 ufacturers in Georgia. for instance, new bank or acquiring an existing percent of total industry assets. By can bring experience and expertise to talent needed when forming a new contrast. it would take 35 percent of similar customers in the Carolinas bank or acquiring an existing one, it the Nation's banking organizations to that a Minneapolis bank cannot. Lend­ becomes obvious that banks simply account for 92 percent of domestic ing to wheat growers in Kansas is simi­ cannot expand without limit. banking assets. The top 10 life insur­ lar to lending to wheat growers in A third consideration is the regula­ ance companies account for 51.5 per­ South Dakota; oil drilling in Wyoming tory delay involved in banking expan­ cent of the total assets of the industry, is similar to drilling in Colorado. sion. At least one regulatory approval vis-a-vis 21.7 percent for the 10 largest In particular, smaller firms may ben­ is needed when forming a subsidiary banking organizations. Continued efit from increased competition that or acquiring a bank. The enactment of State control over banking expansion can result from regional interstate regional banking statutes in New Eng­ will help to ensure that banking con­ banking. The small furniture manu­ land and the Southeast has demon­ tinues to be a relatively unconcentrat­ facturer in Virginia may not be a cus­ strated how banks respond to these ed industry. And to the extent that re­ tomer sought by a money center bank laws, and has highlighted the regula­ gional banking creates strong and moving into that State, but may be de­ tory delays possible. An increased flow more stable banks, State regional sirable to the North Carolina bank al­ of applications to regulators, especial­ banking statutes will promote safety ready familiar with the business. ly those involving new policy ques­ and soundness in the American bank­ COIIP.E'l'ITION tions, slows the pace of regulatory de­ ing system. Regional banking statutes improve cisionmaking and of banking consoli­ SMALL BANKS the level of competition among banks dation. Notwithstanding the fears of smaller in those States where they are enacted On the local level, the concentration banking organizations, regional bank by automatically increasing the issue centers on the acquisition of one holding company expansion appears to number potential entrants to banking bank in a local market by another in pose no threat to the viabutty of small markets in the State. For local bank­ the same market. All holding company banks. The continued presence of ing markets, this means the improve­ acquisitions. though approved by the small banks in competitive major mar­ ment of the level of competition in State and the Federal Reserve Board. kets is a tribute to these banks' these markets when a local organiza­ remain subject to the administration strength. tion is merged with or acquired by an of the Sherman and Clayton Acts by Evidence suggests that small firms out-of-State organization. the Department of Justice. Ample and prefer to deal with smaller banks, and For example, management and the dependable machinery for judging the small banks have long operated profit­ range of services of the merged/ac­ competitive impact of any and all pro­ ably in this competitive environment. quired bank can be significantly en­ posed interstate banking consolida­ Thus, de novo interstate banking or hanced by the . new parent organiza­ tions is already in place. Clear stand­ bank holding company expansion is tion, enabling the bank to compete ards have been consistently applied by unlikely to represent a significant more vigorously with local banks. In the banking agencies, and have been change in the competitive structure of those States where de novo entry is understood by banks and their coun­ small banks. And if a large local com­ permitted, the entry of a new bank sel. so that mergers that would be pro­ petitor is acquired by an out-of-State into the market directly increases hibited by these guidelines are rarely institution, the small local bank's com­ competition. ever proposed. petitive position is probably improved. 24752 CONGRESSIONAL RECORD-SENATE September 11, 1984 The bank in a smaller city or town commercial and industrial growth and SUPPORT FOR REGIONAL BANKING A1'fD TITLE X may be affected significantly by entry relocation, thereby promoting regional Large numbers of banks support re­ of a large out-of-State bank, but such development. Other realities are at gionally reciprocal State banking stat­ banks are unlikely to enter de novo work in addition to economic ones. Re­ utes as a viable alternative to main­ into smaller cities. There are limits to gions share common sociocultural in­ taining the status quo or leaping to the pace at which even the most ag­ terests, and regional residents will sup­ nationwide interstate banking. Some gressive bank can expand following a port regional banking growth that of these banks have already acted change in the law. The small-city bank leads to greater regional benefits. where regional banking is permitted; is most likely to find itself in direct CONSTITUTIONALITY others are waiting for their State to competition with an out-of-State insti­ act. tution if that institution acquires an The Federal Reserve Board, after finding that regionally reciprocal The Senate Banking Committee has existing bank competitor or its parent. voted overwhelmingly to support title But experience has shown that the State banking statutes are not clearly local bank's ability to compete with inconsistent with the U.S. Constitu­ X and the notion of continuing the the larger bank for small business cus­ tion, has approved four mergers/ac­ policy of permitting States to decide tomers is at least as good as its ability quisitions based on such State stat­ their own banking future. Our 12-to-5 to handle existing competition. utes. However, opponents of these vote underscores the wide popularity In addition, many small independent State laws continue to contest the of title X and of maintaining the cen­ banks would have the option under statutes' constitutionality in cases turies-old policy of decentralized bank State regional banking statutes to before Federal courts. It has been control. form regional networks of independ­ noted by many observers that a strong Federal and State bank regulators ent banks. In such a framework, these case has been made for the constitu­ have recognized the need for action banks could pool resources, such as tionality of these statutes. such as that found in title X. For ex­ loan participations and technology, to The Douglas amendment, section ample, I would note the following achieve greater efficiency. Often indi­ 3(d) of the Bank Holding Company statements: vidual States do not provide large Act, prohibits out-of-State bank acqui­ Comptroller of the Currency: "While we enough settings for sufficient econo­ sitions unless such acquisitions are would prefer more extensive geographic de­ mies of scale-but regions do. "specifically" authorized by the stat­ regulation, we welcome any-even partial­ relaxation of the current restrictions. For QUALITY OF SERVICE ute laws of the State in which such instance authorizing reciprocal or regional The level and quality of banking bank is located, by language to that expansion may be a reasonable first step in services provided by expanding banks effect and not merely by "implica­ the direction of nationwide interstate bank­ in a regional banking environment are tion." Congress has exercised its power ing." . bankers will direct their resources for the laws when and if they choose to do CSBS questions the need for the Sunset regional growth. so, no compact requiring congressional provision contained in S. 2181. We are con­ PROTECTIONISM approval is created. cerned that the sunset provision might be It has been argued by some that Regional banking statutes are eco­ intended or understood to cast current state State regional banking statutes are an nomic regulations rationally related to law as an 'experiment' rather than as the act of economic protectionism, leading a legitimate State purpose-that is, body of pertinent law, and that, insofar as to the balkanization of States into the preservation of a banking industry the provisions of this section are a clarifica­ As tion of the degree of delegation under Doug­ banking regions. This turns one of the that is responsive to local needs. las, if they are allowed to sunset it would primary arguments for regional bank­ such, these statutes do not violate the signal open season for lawsuits on the mean­ ing on its head, since regional banking Constitution's equal protection clause. ing of Douglas." on the grounds . . . that the Con­ necticut Interstate Banking Act is unconsti­ viable because they are sensitive to these statutes are designed to accom­ tutional. . . . The Board believes the policy the unique needs, attitudes, business plish. Because of this, and because no issues that are raised by the regional ap­ practices, and commitments of busi­ extraterritorial application of State proach are inherently national and would ness and commerce within the region. law is involved, the due process clause best be resolved by Congressional action." By expanding with a region, these in­ of the Constitution is not violated. Fi­

1981 1982 1983

United Illinois Pel­ United Pel­ United States cen!2 States Illinois cen!2 States llinais

Tolal~ : 3 Dollars...... $545,469 $21,391 ...... $584,782 $22,353 ...... $672,647 $28,591 ...... Pen:ent...... 100 100 ...... 100 100 ...... 100 100 ..... - .... . Grants: Dollars ...... 93,296 4,610 ...... 86,581 4,103 ...... 89,756 4,191 ...... Percent...... 17.10 21.56 + 4.46 14.81 18.36 + 3.55 13.34 14.66 +1.31 Salaries and wages: Dollars...... - .. 73,652 1,928 ...... 77,494 2,068 ...... 101,469 3,317 ...... Pen:ent...... 13.50 9.01 - 4.49 13.25 9.25 -4.00 15.09 11.61 -3.48 Direct~~~ ...... 257,Jl7 12,522 ...... 283,140 13,919 ...... 322,853 18,009 ...... Percent...... 47.10 58.54 + 11.44 48.42 62.27 + 13.85 48.00 62.99 + 14.99 Procurement: Dollars ...... 116,003 1,995 ...... 132,157 2,053 ...... 142,079 2,221 ...... Percent...... 21.27 9.33 -11.94 22.60 9.18 -13.42 21.12 7.77 -13.35 Other~...... 5,398 337 ...... 5,410 211 ...... 16,486 852 ...... Percent...... 99 1.58 +.59 .92 .94 + .02 2.45 2.98 + .53

1 Only includes monies cistriluted to 50 States and District of Qllumbia. Does not include moneys distributed to U.S. territories. 2 Percent difference. 3 Totals may not add due to rounling. Soun:e: U.S. BUIUU of the Census. "Federal Expenditures by State for FISCal Years 1981, 1982, 1983." (Prepared pursuant to The Consolidated Federal Funds Report Act of 1982-Public Law 97- 326.)

TABLE 2.-ESTIMATED FEDERAL TAX PAYMENTS AND TABLE 4.-PER C'.APITA FEDERAL EXPENDITURES BY rATE- TABLE 5.-ESTIMATED FEDERAL TAX PAYMENTS AND FED­ EXPENDITURES IN ILLINOIS, 1 FISCAL YEARS 1976-82 GORY AND RAt ..: UNITED STATES AND IlliNOIS, FISCAL ERAL EXPENDITURES BY STATE, FISCAL YEAR 1982- [Dollars in miHions] YEARS 1982 AND 1983-Continued Continued [Amount in millions of dollars] Expenditures Tax payments FISCal year 1982 Fiscal year 1983 Outflow Tax payment 1 Expenditures 2 Pel- Pel- dollars United Illinois United Illinois llol1ai'S cent Dollars cent States Dollars Rank States Dollars Rank Percent Percent Amount of total Amount of total 1976 ...... $15,290 4.32 $18,005 6.17 - $2,715 1977 ...... 17,337 4.45 21 ,537 6.15 - 4,200 Salaries and 1978 ...... 19,276 4.52 23,859 6.05 - 4,583 wages ...... 335 180 40 432 289 37 West: 1979 ...... 20,785 4.49 28.132 6.16 - 7,347 Alaska ...... 1,723 .29 1,868 .32 1980 ...... 23,033 4.42 30,337 5.98 - 7,304 Dir~\.=t . 1,228 1,214 22 I 1,371 I 1,568 6 Arizona ...... 6,621 1.10 7,465 1.28 1981 ...... 21 ,391 3.92 34,426 5.88 -13,035 Procurement...... 626 179 42 669 193 42 California...... 71 ,286 11.85 75,014 12.83 1982 ...... 22,353 3.82 34,874 5.80 - 12,521 Other ...... 23 18 29 70 74 16 QliO!ado ...... 8,249 1.37 7,613 1.30 Hawaii ...... 2,630 .44 3,433 .59

1 Idaho ...... 1.981 .33 2,102 .36 1 Since columns fO! soending and taxes are estimates which do not include Includes Federal employee life and health insurance programs, in which 6,458 1.07 6,334 1.08 spending categories thai could not be allocated by states, these outflow Illinois received $228 per capita, ranking first among all States, excluding the ~~ic::::::: ::::::::::::::::::: ~::::::::: 11 ,865 1.97 15,955 2.73 numbers are necessarily rough estimates and do not appear in tables prepared District of Qllumbia. Montana ...... 1,906 .32 1.782 .30 by the Congressional ResearCh Service. Additionally, the data base was chani«< Source: U.S. Bureau of the Census. "Federal Expenditures by State for Fiscal Nebraska ...... 3,922 .65 3,324 .57 pursuant to The Consolidated Federal Funds Report Act of 1982, so that data Years 1982 and 1983." Nevada ...... 2,591 .43 2,215 .38 for the years 1976 through 1982 may not be added to fO!m a total multi-year New Mexico ...... 2,716 .46 5,142 .88 outflow. North Dakota ...... 1,684 .28 1,460 .25 Source: Ulian Rymarowicz. "Estimated Federal Tax Payments of Individual TABLE 5.-ESTIMATED FEDERAL TAX PAYMENTS AND 6,878 1.14 5,510 .94 States Corooared to Estimated Federal Outlays in the States. FISCal Years ~Toakaia ·::::::::::::::=::::::::::::::: 1,440 .24 1,601 .27 1976- 82." Washington, OC. Congressional Research Service. Table 1. FEDERAL EXPENDITURES BY STATE, FISCAL YEAR 1982 Utah ...... 3,009 .50 3,710 .64 Washington ...... 12,569 2.09 13,010 2.22 [Amount in mUiions of dollars] Wyoming ...... 1,542 .26 1,048 .18 TABLE 3.-FEDERAL TAX/EXPENDITURE RATIOS AND RANK 1 2 Tax payment Expenditures 1 FOR ILLINOIS, ASCAL YEARS 1977-82 t~n~ ~\ec,lheinConcl~ R:.a r~ -~ J~7 usi:g di~~ilu~ Percent Percent $601.605 billion of actual fiscal year 1982 Federal tax revenues. See also Tax Amount Amount of total Ratio of total Foundation Inc., Monthly Features for March, 1983, page 2. (cents) Rank 2 Computations by CRS from table I of the U.S. Bureau of the Census, New England: Federal Expenditures by State for FISCal Year 1982 (prepared pursuant to the Connecticut ...... 10,783 1.79 11,967 2.05 Consorldated Federal Funds Report Act of 1982, Pulilic Law 97-3261 . Total 1977...... 0.72 47 Maine ...... 2,224 .37 3.100 .53 varies frO!O published amounts by $18.794 billion, of which $12.85 IXIIion 1978 ...... - ...... -...... 75 45 Massachusetts ...... 15,819 2.62 17,313 2.96 was not distributed by States and $5.943 biOion was distributed to U.S. 1979...... 73 46 .40 territO!ies. Note also that the total fund distribution by State accounts for 1980...... 74 47 Mew Hampshire ...... 2,387 .40 2,368 80.29 percent of fotal budget outlays ($728.375 biHion) fO! fiscal year 1982. 1981 ....._____ ...... 67 51 Rhode Island ...... 2,438 .41 2,538 .43 Excluded from the census compilation are interest payments on the Federal Vermont...... 1,092 .18 1.155 .20 debt, unemployment compensation payments by States, and other 1982 ...... - .. - ...... -...... 66 51 Mid-Atlantic: disbursed Delaware ...... 1,751 .29 1,491 .26 expenditureS for which State-by-State allocations were not available. (See Note: Ratio-Federal funds distributed for each dollar of Fede!al taxes paid. Maryland ...... 12.109 2.01 15,065 2.58 introduction in the census report for a detailed discussion.) Rank-f« ratios of Federal dollars distriluted per ft!deral taxes paid, for all of New Jersey ...... 23,583 3.92 16,619 2.84 Source: Replicated frO!O uroo Rymarowicz, fiscal 1982. 50 States and District of Columbia. Rankings range from I to 51. Rankings New York ...... 49,481 8.22 43,835 7.50 and ratios based on six.Qgit ratio computations from tax and expenditure data, Pennsylvania ...... 31,136 5.18 28,481 4.87 with the ~ that Tor the United States, $1 in expenditure equals $1 in Midwest: TABLE 6.-FEDERAL TAX/EXPENDITURE RATIOS BY STATE tax payments. Illinois ...... 34,874 5.80 22,353 3.82 FISCAL YEAR 1982 Source: Same as table 2, except these are taken from Rymarowicz, table 2 Indiana ...... 13,590 2.26 10,111 1.73 for fiscal years 1977-$2. Iowa ...... 7,493 1.25 5,196 .89 24,500 4.07 18,016 3.08 Spencing/ =~.=a ~:::::::::::: : :::::::::::::::::::::: 10,920 1.82 8,560 1.46 taxes Rank TABLE 4.-PER CAPITA FEDERAL EXPENDITURES BY rATE­ Ohio ...... 28,249 4.10 23,282 3.98 ratio WISCOIISin ...... - ...... 11,642 1.94 8,897 1.52 GORY AND RANK: UNITED STATES AND IWNOIS, ASCAL South: Alabama ...... 7,686 1.28 9,668 1.65 New England: YEARS 1982 AND 1983 Arbnsas ...... 4.163 .69 5,100 .87 Connecticut ...... _...... 1.15 16 florida ._...... 25,583 4.25 28,460 4.87 Maine ...... -...... 1.43 5 12,766 FISCal year 1982 Fiscal year 1983 Georgia ...... 11 ,868 1.97 2.18 Massachusetts ...... 1.13 17 7,293 1.21 7,747 1.33 New H~ire ...... ___ ...... _.. 1.10 Z9 !liDs lllinJis r:= ~: : ~ : ~:: : ::::::::::~~::::::=:::: 10,200 1.70 9,575 1.64 Rhode Island ...... -...... 1.05 26 United United Mississippi ...... 4,273 .71 6,562 1.12 Vermont ...... -...... 1.11 19 Slates Slates North CmJiina ...... 12,298 2.04 11,527 1.97 llalars Rank llalars Rank adahoma ...... 7,752 1.29 6,952 1.19 Average ...... _ ...... _._.. 1.14 ...... ,.. __ SoutiiCarolilla ...... 6,006 1.00 7,371 1.26 Mid-Atlantic: TGIJI Tennessee ...... 9,775 1.62 11,359 1.94 Delaware ...... 86 40 apeldtares ..... $2,591 $1,950 46 $2,932 $2,489 34 lew ...... 40,948 6.81 32,114 5.49 Maryland ...... __, ,...... 1.28 9 IDit 13,798 2.29 21,865 3.74 New Jersey ...... ---...... - ...... 72 48 3,977 .66 3,998 .68 New YO!ll ...... - ... --...... _ ...... 91 36 upllldibl'es ·- 379 358 33 3liO 365 J.4 mq;n;:::=-.::=:::::::::::::::::::: September 11, 1984 CONGRESSIONAL RECORD-SENATE 24773 TABlE 6.-FEDERAL TAX/EXPENDITURE RATIOS BY STATE TABLE 7.-PER CAPITA FEDERAL EXPENDITURES BY STATE: TABlE 8.-PER CAPITA FEDERAL EXPENDITURES BY STATE: ASCAL YEAR 1982-Continued TOTAL EXPENDITURES AND PROCUREMENT, ASCAL YEAR TOTAL EXPENDITURES AND PROCUREMENT, ASCAl YEAR 1982-Continued 1983-Continued

~g/ Rank ratio Total CMf.an and Total expencillres defense expencillres procurement P!nnsylvania ...... -...... 94 33 Average ...... 92 ···········-·-·· Midwest: := ::::::::::::: : ::::::::::::::::::::::~:=~:::::::::::::::::::::::: :~ ~~ Gugia ...... _._ ...... 2,290 28 335 33 Missouri..... ·-···---····--·······-·--······· 3,811 6 1,269 4 2,115 40 185 41 Montana ······-····-···-···-·-·--············ 2,698 26 169 45 Iowa...... 71 49 ~M1:! :_:_:: __: :_:::_:_:_:::_:_·_.:_:_:_:_:_~_-_:_._·:_:_:_~_-_·_:_:_:_~_·:::: __ ::_~ _·_ 2,222 33 634 14 Nebraska ... ·-·········---··---·-···-· 2,711 25 194 41 =a·:::::: ::::-~:::: : :::::: ::: :::: ::~~ ::: :::::::: :: :::::: : ~ ll _,.,...... 2,593 17 580 17 Nevada ·-··-·-·····--·-··--·······-·-· 2,916 16 767 10 Ohio ...... 85 41 North Carolina ...... 1,936 47 168 43 New Mexico ...... ______3,826 5 1.381 3 WISCOnSin...... 78 45 Oklahoma ...... 2,243 31 212 38 North Dakota ...... 3,129 11 287 37 ----- South Carolina •...... ·-·····--··-··--··-·· 2,327 27 370 31 2,335 44 144 48 Average ...... 76 ...... Tennessee ...... ·-····-·--··-·············· 2,463 23 584 16 ~ToakOia·::::.=:=:::::::::::::::::: 2,751 22 166 46 2,175 37 536 20 Utah ····-···-----·--··················- 2,540 33 537 19 South:Alabama ...... -...... 1.29 180 ~West~Vi··;=;~: :=~----·-.·::.· _: __··_: __ : __·· .··_:_~_-_:_::._ ·_:_:_~.·.~. -~~-·-. 4,027 2 1,203 4 3,555 8 1,206 7 Arbnsas ...... 1.26 "<>"'oa.... -- .... 2,048 44 86 50 =n:;~-==~=-~~~=~=.:_~:= 2,315 41 136 49 Florida...... 1.15 15 West: Gugia ...... 1.11 20 Alaska ...... ·-····· 4,533 1 1,089 6 United States····-······------·-·········-· 2,932 ·········-····· 669 ···-··--· Kentucky 1.09 23 Arizona ···-·--·-··---·-----···-····-·· 2,672 13 649 13 3,100 8 1,126 5 Year~ ~ .S. Bweau of the Census, "federal Upencitures by State for fiscal = ::::::::::=::::::::::::::::::::=::::::::::::::::::::::=: 1 .96 31 ~r~omia ...... 2,568 18 616 IS North ~rorlll3 ...... : ~ ~ =:..::::::::::::::::::::::::::::::::::::::::::: 3,499 6 356 32 Note.-Ranks do not indllle District of Columbia, but U.S. total does Oklahoma ...... 92 35 Idaho _ ...... - ...... 2.192 36 410 27 include District of Columbia. Figures for District of Columbia are: Per capita 2,658 15 663 12 total expenditures-$18,473; and pe1 capita procurement-$2,148. ~~.:::::::::::::::::::::::::::::::~~:::::::~.:::::::::: H~ g ~.::==~~:::::~:::::::::::::::::: : :::::: 3,229 7 1,257 3 Texas .81 43 Montana ..... ---·-···-·-···--·-·-·--· 2,247 29 121 49 2,108 41 152 46 TABlE 9.-TAX/EXPENDITURE RATIOS OF DISADVANTAGED :~~~~ : : ::::=:::::~~=::::::::::~~=::: :: ::=:=~~:::::: t~ 2~ ~.::: : :::::::=~~:=-~=:=:~~:::::: 2,621 16 664 11 ----- New Mexico ---·--······-········-····-· 3,872 3 1,501 2 STATES EUGIBlE UNDER All SECTIONS OF STATE MINI­ Average ...... -...... 1.09 ...... North Dakota ...... 2,219 35 155 45 2,079 43 149 47 MUM RETURN ACT, FISCAL YEAR 1983 West: Alaska...... 1.10 21 ~~~:::_--:::::: : ::=:::::::: : =~~ 2,335 26 160 44 Arizona ...... 1.16 14 Utah ...... ---··.. ···-·--······-·-·· 2,444 24 542 19 Ratio Rank 1 California...... 1.08 24 Washington ···-·········-··-····--··········· 3,085 9 946 9 2,129 39 210 39 ft!':. ::::::::::: :: :: :::::::: :: : ::::::::::::::~: ::::::::::: :::::::: d~ 3~ Wyoming .. -·-··---·---···--·=-··-·· Mit-Atlantic: 2,591 ······-·-···· Idaho ...... -...... 1.09 22 United States.·--·············-···--····-·.. ··· 626 ·······-···· Delaware .... ·--·-·---·--··-··--·-·-- $0.80 46 2 New Jersey --·-·······-·-·-··------.68 51 =if::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: l : ~~ ~ Source: U.S. Bureau of the Census, "Federal Upencitures by State for FLu Midwest: Montana...... 94 34 Year 1982." lmnois ...... ·-······· ·······················-··-······--··-·- ··· .75 48 Nebraska ...... -····-·---········· ····· .88 39 Note. -Ranks do not include District of Columbia, but U.S. total does lndiana ...... ·-·······----········-·······--······- .83 43 Nevada...... 88 38 lowa ...... ·-···- ·-··--·---·--.. ------··· .86 41 New Mexico...... 1.91 2 ~~~r.ffl: r:= ~~~9~ Per C3!Xta .79 47 North Dakota ...... 89 37 =~=a.::::::::::::::::::::::==::::::=:= .86 42 Ohio ...... ·-····-······-··-·······-····-··--.. ----- ·-- .87 39 ~oakiiia :::::::::::::::::::::::::::::::::::::::::::::::::::::::::: 1 :~~ 1~ TABLE 8.-PER CAPITA FEDERAL EXPENDITURES BY STATE: WISCOilSin ·······-·············-····-·······-·······-·-·-·····-· .82 45 utah...... 1.26 12 South: Washington ...... ·-······-······· ···············-·-········-··-··· 1.06 25 TOTAL EXPENDITURES AND PROCUREMENT, FISCAL YEAR louisiana...... ·-·······-·-----·-·······--·--·-·· .86 40 Wyoming...... 69 50 Oklahoma·-·····························---·····-.. --·· .82 44 1983 Texas ...... 75 49 Average ···············-··············-····-························ 1.09 ··-·············· West: Northeast ········································-·······-··············-······· .97 ···········-···· Total llvilian and Colorado ...... _ ...... 89 38 Midwest.. ...-········· ····--·················-··························-···· .76 ·········-····­ expencitures defense Wyoming ...... -...... 70 50 Northeast and Midwest...... 87 ···--···-·-··· procurement South ...... 1.09 ·-··-··········· 1 West ...... 1.09 ...... Includes District of Columbia, which ranked first. Rank South and West ...... 1.09 ··············-·· ~ ~ Rank Note.- These ratios differ from those in table 6 for fiscal year 1982 District of Columbia ...... 4.02 1 mg because of the addition of two spending categories (expenditures for Postal Service procurement and salaries and expenditures for Federal employee Hie and U.S. average ...... 1.00 ...... New England: health insurance) to the data base for "Federal Expenditures by State for Connecticut...... $3.750 7 $1 ,755 1 FIScal Year 1983," that increased signifantly the amount of Federal spending Source: Rymarowicz, fascal 1982. Maine ...... 2,679 27 378 32 allocated to IHinois, Michigan, Texas, and other large states. Massachusetts.-...... 3,484 9 1,112 8 Source: U.S. Bureau of the Census, "Federal Upenditures by State for FIScal New Hampshire ...... 2,784 20 601 14 Yea! 1983," and Tax Foundation, Inc. "Monthly Tax Features." (Washington, TABlE 7.-PER CAPITA FEDERAL EXPENDITURES BY STATE: Rhode Island ····-···················-············· 2,946 14 425 24 DC, April1984) . Vermont...... -...... 2,551 31 374 33 TOTAL EXPENDITURES AND PROCUREMENT, FISCAl YEAR MiG-Atlantic: 1982 Delaware ...... 2,572 30 381 31 TABlE 9A.-TAX/EXPENDITURE RATIOS OF ADVANTAGED Maryland······-·························-··········· 4,211 3 1,246 5 New .ler3ey ...... 2,481 35 416 25 STATES 2,906 17 549 17 Total Civilian and New Y0111 .. ·-·····-···-··························- [In millions of dollars] expenditures defense Pennsylvania ...... 2.786 19 345 35 procurement Midwest: 11finois ...... ---······-·····-····-············-· 2,489 34 193 42 Ratio Rank 2,199 49 398 28 ~ Indiana -············-·············-····-············ mg Iowa··-·····-·······-······-·-·········-··········· 2,250 46 179 43 Michigan...... 2,203 48 214 38 New England: Minnesota ...... 2,437 36 428 23 Maine...... $1 .22 12 New Englanl: Ohio---······························"················ 2,435 37 415 26 Massachusetts ························-·················-·-··-···· 1.09 24 Connecticut ...... ·-·······--···-·····-··-· $3,819 4 $2,129 1 Wisconsin ...... 2,220 47 208 39 Rhode Island ...... ---················----·· 1.05 27 Maine -························-············-········· 2,736 12 715 10 South: Vermont ·········-···················-············-······-···· .. ··-· 1.09 22 Massachusetts ...... 2,999 10 975 7 Alabama ...... 2,717 24 346 34 Mid-Atlantic: 2,530 19 574 18 Arbnsas ·····-·-··································· 2,609 28 309 36 Maryland ...... -·············-··········· .. ·-·--··.. ··-···· 1.29 ~-~ :: :: :: ::::~~~ ::: : : ::::::::::::: : :: 2,663 14 411 25 Florida ...... 3,047 12 542 18 South: Yennant:::e ...... 2.239 32 412 26 Georgia ...... 2,580 29 457 22 Alabama...... 1.29 9 MiJ.AIIantic: Kentucky ·-·-····-··-···-·········-··········-·· 2,376 40 207 40 Arkansas ...... ·-·······-···-···-·············--·-·· 1.33 7 Delaware ·-··--·-·-·····--·······-········- 2,493 20 516 21 2,326 45 412 27 Florida ...... -...... - ... ·····--···- 1.10 18 754 11 Malyland ···-··················-·······--·········· 3,534 5 959 8 = :::::~-::::::::::::::::::::~:::::::::::::: 2,978 13 21 New .IelSey ...... - ..•• 2,245 30 442 24 North Carolina ...... 2.114 50 151 47 23 New Y0111 ... -·················-····-··-···-·-··· 2,490 21 503 22 l*Jahoma ·-·········································· 2,355 42 170 44 =:~::=:~:::::::::=::::::::::::::::::::::=:=:.::: 1 : ~ 3 Pennsylvania ...... _...... 2,399 25 335 34 South carolina ...... 2,547 32 392 29 South ~rolina ...... ·-·-·- 1.24 11 Midwest: Tennessee ...... 2,757 21 560 16 13 Illinois...... ---·---····-····---- 1,950 46 179 42 2,347 43 519 21 ~~~::::::::::::::::::::::::=::::::::::::::: : ::=:~== l : ~! 4 lnliana ·-·······--··-·-·-···----····--···---· 1,849 49 388 30 4,503 I 1,426 2 West Virginia ...... --·-···· 1.08 26 Iowa ··-··-·· .. -.... ----········--·-··-··· 1,792 50 147 48 ~~::::.=::=:::::=:::::::::::::::: 2,404 39 94 50 West: lllidipn...... ----·-····-·-·- 1,957 45 200 40 West: Arizona ·········---···--····-·-·-·--·····----······ 1.10 20 llinnesoli ...... ----· 2,091 42 391 29 Alasb ...... 4,296 2 1,009 9 25 (Jio______...... _ ..... california ···-·-····-·--·····-·---·-···-- ·-·--···-· 1.08 Wisr:lonsin _. _.. ______2,160 38 405 28 Arizllna ...... ·-···-······---········-·· 2.751 23 581 15 Hawaii····-·····-····--···--········--······ .. ····-········---- 1.39 6 1,872 48 226 37 California·····-··-··········--········-·····-- 3,429 10 1,226 6 16 South: QJioradD ·-·--·-··-······---.. ········-·········· 2,824 18 669 13 :We:::::=:::::::::::::=::: : =~-~~~===~ u~ 5 AllblmaArURsas ....._ - ...... ______---·--·--·------2,468 22 330 35 Hawaii ...... 3,928 4 522 20 Nelnska..Montana. •.... ______·-····--··-······-·-·_____····-·····"-··-··--··-·-··______.. __ 1.941.10 19 2,221 34 266 36 ldaiiD _____...... 2,420 38 385 30 28 Florida ...... ----·-·---·----- 2,795 11 487 23 Kansas ...... 2,938 15 691 12 New Mexa ..------· " 1.67 2 24:774: CONGRESSIONAL RECORD-SENATE September 11, 1981, TABLE 9A.-TAX/EXPENDITURE RATIOS Of ADVANTAGED National Ta:r Journal, XXXVI, No. 4. De­ stance, are collected in states in which a STATES-Continued cember, 1983. company's headquarters are located, but the --. "The New Federalism in Illinois," taxes are actually paid in many states in [In miions ~ OOIIals] nlinois Iasues. March, 1982. which offices or subsidiaries of the company --. "Turning Back the Clock: The New are located. Rank Federalism in Illinois, Part II," nlinois Issues. June, 1982. III. DESIGNATION OF REALLOCABLE FEDERAL North Dllulta ...... 1.16 15 --. "Where the Shoe Pinches: The EXPENDITUIU!S South Dllulta ...... 1.26 Utili ...... 1.20 l~ 1983 Reagan Budget," Economic OuUook Which types of Federal expenditures are Washin&IDn ...... 1.13 17 USA. Spring, 1982. exempt from the bill. Congressional Research Service , Estimated Federal Ta:r Pay­ which by law are limited to certain states. ments of Individual States Compared to Es­ These include the Bureau of Reclamation, TABLE 10.-TAX/EXPENDITURE RATIOS Of DISADVANTAGED timated Federal Ta:r OuUays in the States, the Tennessee Valley Authority, the Bonne­ Fiscal Years 1976-1982. Washington, D.C., ville Power Administration. STATES EUGIBLE FOR PROCUREMENT PROVISIONS OF published annually. Salaries and wages of Federal employees; THE STATE MINIMUM RETURN ACT Miller, Victor J. "Recent Changes in Fed­ Maintenance of Federal buildings and in­ [FISCal year 1983] eral Grants and State Budgets." Offsetting receipts ; and the Federal Fisc, VII, Fiscal Year 1982. Direct payments to individuals, including July 25, 1983. Social Security; unemployment compensa­ .... EnalaAd:Connecticut ...... $0.94 33 Northeast-Midwest Institute. The Federal tion; Medicare; Food Stamps; Black Lung New Hampshire ...... 97 31 Balance of Pavments: Regional Implica- Mid-AIIantic: Disability; Supplemental Security Income; New Yen ...... - .... - ...... - ...... - .92 35 tions of Government Spending. Washington, National Guaranteed Student Loans; Pell Pennsylvania ...... 98 29 D.C.: Northeast-Midwest Institute, August, grants; lower income housing assistance; South: 1980. North Carolina ...... _ ...... - .. .95 32 social insurance and retirement payments West: Pack, Janet Rothenberg. "The States' for railroad workers; excess earned income Alaska ...... 94 34 Scramble for Federal Funds: Who Wins, tax credits; veterans assistance; Federal Kansas._...... - ...... ,_,,__ ., _ .. ,_ .. . .97 30 Who Loses?" Journal of Policy Analysis and Nevada...... ,_.. ,...... •92 workers; compensation, retirement, and life Oreeon ...... 90 ~ Management, I, No. 2 <1982> . and health insurance. Resek, Robert W. and Kosobud. Richard Scute: See IJble 9. F. . The Midwest Economy: Issues IV. REALLOCATION AUTHORITY and Policy: The Federal Balance of Pay­ Who administers adjustments in spending. NoTES ments with Midwest States. Champaign, llli- The head of each Federal agency will real­ nois: Bureau of Economic and Business Re­ locate spending to eligible states necessary 1. Advisory Commission on Intergovern­ search, University of Illinois at Urbana­ to meet the requirement of a 90 percent mental Relations , Regional Champaign, 1982. return by Fiscal 1989, after consultation Growth: Flows oJ Federal Fund8, 1952-76. Schoeplein, Robert N., The Midwest Econ­ with the Director of OMB. Washington, D.C., Government Printing omy, Issues and Policy: The Federal Balance For the purpose of these adjustments in Office, June, 1980; Lilian Rymarowicz, Esti­ of Pavments with Midwest States. Cham­ spending, all administrative requirements mated Federal Ta:r Payments of Individual paign, illinois: University of illinois at will de- after the end of each Fiscal Year, the Direc­ page 13. termine the eligibility of states on an tor of OMB will report to Congress regard­ BIBLIOGRAPHY annual basis, after consultation with the Di­ ing the progress made by each agency. Advisory Commission on Intergovernmen­ rector of the Census Bureau, who publishes How these firms receive contract awards. tal Relations . Regional data on Federal expenditures in states, and For competitive procurements, a firm that Growth: Flows of Federal Fund8, 1952-76. the Commissioner of the Internal Revenue will perform the contract in an eligible state Washington, D.C.: Government Printing Service , who collects taxes from the will receive a contract award if its bid is Office, June, 1980. states. The Commissioner of the IRS will lower or equivalent to the bid of a firm that Advisory Commission on Intergovernmen­ consult with the National Tax Foundation, will perform the contract in an ineligible tal Relations. Intergovernmental Perspec­ a private, non-profit organization that has a state. tive. IV, No. 4. Washington, D.C.: Govern­ widely-accepted methodology for allocating For noncompetitive procurements, a firm ment Printing Office, Fall, 1978. actual tax burdens in states. These actual that will perform the contract in an eligible Anton. Thomas J. "The Regional Distri­ tax burdens often differ from tax collec­ state will receive a contract if it can com­ bution of Federal E xpenditures, 1971-1980," tions from states. Corporate taxes, for in- plete th e contract at a lower or approxl- September 11, 1981,. CONGRESSIONAL RECORD-SENATE 24775 mately equivalent price as a firm that will velopment these provisions, it must be determined by <4> Offsetting receipts-Examples-sale of minois.-Aid to Families with Dependent the head of the contracting agency to have mineral leasing rights owned by the federal Children.-Increase from $442 million to met the requirements of section 8<7> of government, sale of timber from national $485 mllllon, an increase of approximately the Small Business Act, including capabil­ forests, sale of offshore oil leasing rights, $43 million, based on a percentage increase ity, competency, capacity, credit, integrity, sale of water for irrigation. from 5.6 percent to 6.2 percent of the na.. perseverance, and tenacity. Direct Payments to Individuals (Page tiona! total. quirements utilized for the issuance of a cer­ 3, line 13-Page 4, line 5 >. Medicaid.-Increase from $728 million to tificate of competency, required of all firms Supplemental Security Income-Supple­ $905 mllllon. an increase of approximately seeking to obtain government contracts.> In mental income for poor and elderly people $177 mllllon, based on a percentage increase the case of pre-qualification requirements, in addition to Social Security. It is needs­ from 4.3 percent to 4.8 percent of the na­ the firm must be notified in writing of nec­ tested, not based on income like Social Secu­ tional total. essary standards and it must meet those rity. standards in a timely manner. Wastewater Treatment-Increase from Social Insurance Jor Railroad Worker8- $142 million to $194 million. an increase of V. REALLOCATION Jo:CHANISIIS (COntinued) Unemployment insurance payments for rail­ approximately $52 million, based on a per­ Federal Orants.-For all grant programs road workers; benefits for Conrail employ­ centage increase from 5.9 percent to 6.5 per­ of the various Federal agencies, such as the ees and Milwaukee railroad workers. cent of the national total. Department of Transportation, the Depart­ Section &-Reallocation Authority . In­ or $110 mllllon. of the grant program in the crease of 10 percent in its percentage share crease from $530 million to $564 million. an first Fiscal Year after enactment of the bill, of total contract dollars, based on an aver­ increase of approximately $34 million. based assuming the program was funded at the age of its percentage shares over the past on a percentage increase from 2. 7 percent to same level in that year. three fiscal years. 3.0 percent of the national total. How adjustments are made without overly HypotheticaL-If a state received an aver­ Minnesota..-Wastewater Treatment (86' disrupting programs and ineligible states. age of $5 bllllon in contracts over the past return>. Increase from $47 million to $63 ProJects that are individually authorized three years, and the total contracts awarded million, an increase of approximately $16 and appropriated will only years, the state's average share would be 5 1.6 percent to 2.1 percent of the national be covered by the bill to the extent practi­ percent. Under the bill, the state would re­ total. cal. ceive 5.5 percent in the first year, or $5.5 bil­ Ohio.-Urban Mass Transit <87~ return). No state will receive more than a 10 per­ lion. a 10 percent increase. In the second Increase from $102 million to $120 million. cent cut in any one program over the previ­ year, the state would receive 6.1 percent, or an increase of approximately $18 million, ous Fiscal Year directly as a result of the $6.1 bllllon, and so forth, assuming that based on a percentage increase from 2.8 per­ bill. total contracts remained at $100 bllllon per cent to 3.3 percent of the national total. No reallocation can be made if it will year. result in any state receiving less than a 90 Procurement-State Example . fflinois-Total procurement would in­ Schedules of the United States to clar­ This bill cannot be amended without spe­ ify the duty treatment of certain types cific reference to this bill. crease from $2.2 billion to $2.5 bllllon, an in­ crease of <75' return) approximately $300 of plywood; to the Committee on Fi­ VII. EFFECTIVE DATE mllllon, based on a percentage increase from nance. The bill will take effect in the first Fiscal 1.4 percent to 1.6 percent of the national Year after enactment of the bill. total. TARIFF TREATMENT OF CERTAIN TYPES OF Defense procurement would increase from PLYWOOD GUIDE TO THE STATE MINnroJ,( RETURN ACT $1.48 bllllon to $1.63 billion, an increase of Mr. GORTON. Mr. President, the OF 1984 approximately $150 million, based on a per­ measure I am introducing today is Section 4-Ellgible States (Page 2, lines centage increase from 1.2 percent to 1.3 per­ aimed at correcting an anomaly in the 11-22). cent of the national total. U.S. Tariff Schedules. Under existing States with less than a 90 percent Indiana-Total procurement would in­ Tariff Schedules, edge-worked ply­ return eligible for all sections of the bill <14 crease from $2.2 billion to $2.5 billion, an in­ wood sheets-tongue and groove or states>: crease of (83' return> approximately $300 Colorado, Delaware, illinois, Indiana, million, based on a percentage increase from shiplap plywood-are being treated by Iowa, Louisiana, Michigan, Minnesota. New 1.4 percent to 1.6 percent of the national the CUstoms Service not as plywood Jersey, Ohio, Oklahoma, Texas, Wisconsin, total. sheets, but as building boards chiefly Wyoming. Michigan-Total procurement would in­ "used in the construction of walls, ceil­ States with less than a 100 percent crease from $1.9 bllllon to $2.4 billion, an in­ ings, or other parts of buildings." The return eligible for section regarding pro­ crease of <79¢ return> approximately $500 tariff rate on this latter category is curement <9 states>: mllllon. based on a percentage increase from less than half the former, resulting in Alaska, Connecticut, Kansas, Nevada, New 1.37 percent to 1.51 percent of the national Hampshire, New York, North Carolina, total. an inflow of edgeworked Canadian ply­ Oregon. Pennsylvania. Federal Grants.-Each state receives 110 wood sufficient to cause significant Section 5-Designation of Reallocable percent of its average share over the past distress to plywood manufacturers in Federal Expenditures. three fiscal years. For example, if a state the Pacific Northwest. Spending categories not included Water and energy programs restricted cent, it will receive $110 million in the first toms Service's current practice is an to regions, including Tennessee Valley Au­ year after the bill has been enacted, or 11 thority , percent. In the second year, it will receive absurdity. Tongue and groove plywood Bonneville Power Administration by inserting immedi­ February, in EEOC against Hernando ately before the semicolon at the end there­ purpose in drafting the bill in this of the following: "or any edge of which has Bank, the fifth circuit held that the manner was to ensure that the bill's been tongued, grooved, lapped, or otherwise legislative veto provision was severable only consequence is to overturn the worked"; from the rest of the Reorganization decision in EEOC against CBS, Inc. <2> in paragraph by inserting immedi­ Act and that authority over ADEA We did not, it the name of simplicity, ately before the semicolon at the end there­ was validly transferred to the Commis­ of the following: "or any edge of which has sion. Last month, the sixth circuit, in use this bill to create new rights or been tongued, grooved, lapped, or otherwise Muller Optical Company against new responsibilities. As written, it worked"; and EEOC, also affirmed that the EEOC simply protects the existing delegation <3> in paragraph by striking out "chief­ of authority for the enforcement of ly used in the construction of walls, ceilings, may enforce ADEA, on the grounds ADEA and the Equal Pay Act. For or other parts of buildings" and inserting in that an unexercised legislative veto these reasons, I hope that Congress lieu thereof "other than plywood, wood­ does not violate the constitutional sep­ will act on this bill expeditiously. veneer panels, or cellular panels". aration of powers when the executive SEc. 2. The amendments made by the first action approved by Congress, the Mr. President, I ask unanimous con­ section of this Act shall apply with respect sent that the bill be printed in full in transfer of authority over ADEA and the RECORD. to articles entered, or withdrawn from ware­ the Equal Pay Act, does not affect house for consumption, on or after the date There being no objection, the bill of the enactment of this Act. substantive rights or alter enforce­ was ordered to be printed in the ment powers. RECORD, as follows: By Mr. HATCH pursuant to sections ganization plan to both Houses of section 707 of title VII of the Civil 4(d)(l); 4; 9; 11 (a), (b), and ; 16 and ; and 17 of the Fair Labor Standards Act, Congress, and the plan would become Rights Act of 1964, as amended. as amended (29 U.S.C. 204(d)0); 204; 209; effective unless either the Houses of It should be noted that this bill is 211 (a), , and ; 216 (b) and ; and Representatives or the Senate object­ not intended to send a signal that Con­ 217)) and section 10(b)(l) of the Portal-to­ ed to the plan within 60 days of its gress now believes all of the statutes Portal Act of 1947, as amended <29 U.S.C. submission. containing legislative veto provisions 259). A reorganization plan submitted to are invalid nor that new legislation is TRANSFER OF AGE DISCRXJIUNATION Congress in 1978, among other things, necessary to overcome the problems ENFORCEMENT FUNCTIONS transferred authority over ADEA and posed by the Supreme Court's decision SEC. 3. All functions vested in the Secre­ the Equal Pay Act from the Depart­ in Chada. To the contrary, I believe tary of Labor or in the Office of Personnel ment of Labor to the Equal Employ- that the opinions of the fifth and Management pursuant to sections 2, 4, 7, 8, 1964, as amended <42 U.S.C. 2000e-14), are The basis for the court's decision 9, 10, 11, 12, 13, 14, and 15 of the Age Dis­ hereby transferred to the Equal Employ­ was the fact that the 1977 Reorganiza­ crimination in Employment Act of 1967, as ment Opportunity Commission. The Equal tion Act, which provided the President amended <29 U.S.C. 621, 623, 626, 627, 628, Employment Opportunity Coordinating 629, 630, 631, 632, 633, and 633a>. are hereby Council is hereby abolished. general authority to promulgate exec­ utive branch reorganization plans, transferred to the Equal Employment Op­ SAVINGS PROVISION portunity Commission. All functions related contained a "one-house legislative to age discrimination administration and en­ SEC. 8. Administrative proceedings includ­ veto" provision, a concept which has forcement pursuant to sections 6 and 16 of ing administrative appeals from the acts of been held uncontitutional by the U.S. the Age Discrimination in Employment Act an executive agency Supreme Court in the landmark of 1967, as amended <29 U.S.C. 625 and 634), Chadha case of last year. Most impor­ are hereby transferred to the Equal Em­ commenced or being conducted by or ployment Opportunity Commission. against such executive agency will not abate tantly, unlike two other Federal cir­ by reason of the taking effect of this Act. cuit courts which have considered the TRANSFER OP EQUAL OPPORTUNITY IN FEDERAL Consistent with the provisions of this Act, issue, the second circuit declined to DIPLOYKENT ENPORCEIIENT FUNCTIONS all such proceedings shall continue before uphold the EEOC enforcement au­ SEC. 4. All equal opportunity in Feder­ the Equal Employment Opportunity Com­ al employment enforcement and related mission otherwise unaffected by the trans­ thority on the basis that the legisla­ functions vested in the Office of Personnel fers provided by this Act. Consistent with tive veto provision was severable from Management pursuant to section 717 the provisions of this Act, the Equal Em­ the remainder of the Reorganization and of the Civil Rights Act of 1964, as ployment Opportunity Commission shall Act or that Congress had subsequently amended <42 U.S.C. 2000e-16 and or its successor the law. our introduction of this legislation function of making a preliminary determi­ INCIDENTAL TRANSFERS should not be taken as an indication nation on the issue of discrimination when­ that we approve of the second circuit ever, as a part of a complaint or appeal SEC. 9. So much of the personnel, proper­ ty, records, and unexpended balances of ap­ holding in EEOC against CBS, Inc. before the Office of Personnel Management Indeed. the Commission had indicated on propriations, allocations, and other funds other grounds, a Federal employee alleges a employed, used, held, available, or to be that it plans to seek an en bane re­ violation of section 717 of the Civil Rights made available in connection with the func­ hearing and possible further appeal of Act of 1964, as amended <42 U.S.C. 2000e- tions transferred under this Act, as the Di­ that case. It could be that future de­ 16), provided that the Equal Employment rector of the Office of Management and velopment might render this legisla­ Opportunity Commission retains the func­ Budget shall determine, shall be transferred tion unnecessary. to the appropriate department, agency, or tion of making the final determination con­ In the interim, however, there is a cerning such issue of discrimination. component at such time or times as the Di­ rector of the Office of Management and cloud of uncertainty over the author­ TRANSPER OP FEDERAL EMPLOYMENT OF HANDI· Budget shall provide, except that no such ity of the EEOC to carry out its vital CAPPED INDIVIDUALS, ENFORCEMENT FUNC­ unexpended balances transferred shall be mission of enforcing the several stat­ TIONS used for purposes other than those for utes protecting the elderly from em­ SEC. 5. All Federal employment of handi­ which the appropriation was origlnally ployment discrimination, particularly capped individuals enforcement functions made. The Director of the Office of Man­ within the geographical confines of and related functions vested in the Office of agement and Budget shall, as necessary, Personnel Management pursuant to section Council abolished herein and for such fur­ necticut and Vermont. If that cloud of 501 of the Rehabilitation Act of 1973 <29 ther measures and dispositions as such Di­ uncertainty is not promptly removed U.S.C. 781), are hereby transferred to the rector deems necessary to effectuate the by other means, we believe Congress Equal Employment Opportunity Commis­ purposes of this Act. will move expeditiously to enact what­ sion. The function of being cochairman of EFFECTIVE DATE ever legislation may be necessary to the Interagency Committee on Handicapped ensure that the several statutes which Employees now vested in the Chairman of SEc. 10. Sections 2 through 5 of this Act the Office of Personnel Management pursu­ shall take effect on July 1, 1979, and sec­ protect the rights of individuals from ant to section 501 is hereby transferred to tions 6 and 7 of this Act shall take effect on age discrimination in employment are the Chairman of the Equal Employment July 1, 1978. fully enforced. Opportunity Commission. e Mr. THURMOND. Mr. President, I Mr. President, the legislation we are TRANSFER OF PUBLIC SECTOR 707 FUNCTIONS am pleased to join with the distin­ submitting today essentially ratifies SEC. 6. Any function of the Equal Employ­ guished chairman of the Labor and and codifies the transfer to the EEOC ment Opportunity Commission concerning Human Resources Committee, Senator of enforcement authority over various initiation of litigation with respect to State HATCH, and other Senators in sponsor­ employment discrimination statutes or local government, or political subdivi­ ing legislation to ratify the transfer of encompassed within the reorganiza­ sions under section 707 of title VII of the enforcement authority for the Age tion plan No. 1 of 1978. It may be that Civil Rights Act of 1964, as amended <42 U.S.C. 2000e-6), and all necessary functions Discrimination in Employment Act this legislation can be refined and im­ related thereto, including investigation, and certain other statutes to the proved, and as earlier mentioned, de­ findings, notice, and an opportunity to re­ Equal Employment Opportunity Com­ velopments could render the legisla­ solve the matter without contested litiga­ mission [EEOC]. tion unnecessary. There must be no tion, are hereby transferred to the Attorney The authority of the EEOC to en­ doubt, however, that the commitments General, to be exercised by him in accord­ force this key Federal statute, which to protecting our citizens, particulary ance with procedures consistent with said prohibits employment discrimination older Americans, from unlawful dis­ title VII. The Attorney General is author­ against older workers, has been called crimination in the workplace will be ized to delegate any function under section 707 of said title VII to any officer or em­ into question by a recent decision of fulfilled. It is in that spirit that I join ployee of the Department of Justice. the U.S. Court of Appeals for the with my several distinguished col­ second Judicial Circuit. On August 28, leagues and cosponsors in submitting TRANSFER OP FUNCTIONS AND ABOLITION OF THE EQUAL EMPLOYMENT OPPORTUNITY COORDI­ 1984, in the case EEOC against CBS, this legislation today.e NATING COUNCIL Inc., the second circuit invalidated the Mr. HEINZ. Mr. President, as chair­ SEC. 7. All functions of the Equal Employ­ authority of the EEOC, transferred to man of the Senate Aging Committee, I ment Opportunity Commission Coordinat­ it by President Carter's reorganization support Senator HATCH's bill to en­ Ing Council, which was established pursuant plan No. 1 of 1978, to enforce the Age force both the Age Discrimination in to section 715 of the Civil Rights Act of Discrimination in Employment Act. Employment Act [ADEAl and the

81-059 ~~(Pt. 18) 24778 CONGRESSIONAL RECORD-SENATE September 11, 1984 Equal Pay Act. This legislation was employment opportunities for older In addition, the families of head made necessary by an August 28 deci­ persons who are willing and able to injury victims are faced with a number sion in the Second Circuit Court of work. Age discrimination in employ­ of emotional and financial problems. Appeals. The second circuit's decision ment continues to be a major reason Many head injury victims are coma­ stated that the transfer of authority why middle-aged and older workers tose for extended periods of time and for the ADEA was unconstitutional be­ are systematically excluded from the need special services and treatment; cause it was authorized by the Reorga­ opportunity to work. The first legisla­ however, there is a lack of facilities de­ nization Act of 1977, a statute which tive response to this concern was the signed to meet the special treatment contained a "one-house legislative ADEA. and rehabilitation needs of the head­ veto" provision. The court was not During the first 10 years after its en­ injured. As a result, many families, taking issue with the merits of the actment, enforcement of the ADEA themselves, are left with the burden of transfer, nor was it commenting on was the responsibility of the Depart­ caring for their disabled family mem­ the effectiveness of the EEOC in car­ ment of Labor. In 1979, by Executive bers. rying out its enforcement activities. order, enforcement responsibility for A great many of these families have Rather, the court merely drew upon the ADEA shifted from DOL to the experienced great frustration and a the precedent established in the Su­ EEOC. Age discrimination charges sense of helplessness in their search preme Court's Chada decision and now constitute a significant portion of for appropriate facilities and treat­ ruled that the transfer was unconsti­ the EEOC's caseload. Indeed, the age­ ment for head-injury victims. As a con­ tutional because of a legislative veto related jurisdiction is the fastest grow­ sequence, they have joined together decision. ing of all civil rights enforcement stat­ with a number of health care profes­ It should also be noted that there utes. A report by the EEOC placed the sionals to form the national head have been two recent decisions, one in nfunber of age-related charges filed injury foundation. This organization, the fifth circuit and one in the sixth during fiscal year 1983 at 15,303. The together with its numerous State circuit, affirming that the EEOC may magnitude of the problem of age dis­ chapters, has been working tirelessly enforce the ADEA. I agree with Sena­ crimination, as well as the increasing to educate the public about the prob­ tor HATCH that this bill is not intended importance of enforcement measures lem of head injury and the needs of to send a signal that Congress now be­ designed to combat such discriminato­ disabled head-injury victims. The Na­ lieves all of the statutes containing ry practices, underscores the necessity tional Head Injury Foundation has legislative veto provisions are invalid. for the EEOC to have clear authority committed itself to bring the problems Rather, I believe that the opinions of to enforce the ADEA. of head injury to national attention the fifth and sixth circuits which I I urge my colleagues to join me in and to provide the families of head­ just mentioned are accurate and that cosponsoring this legislation. injury victims with the necessary fa­ if appealed, the decision by the second cilities and resources. circuit would be overturned. By Mr. DANFORTH (for himself and Mr. KENNEDY): Senator KENNEDY and I urge you to However, the necessity of this legis­ support this effort by designating Oc­ lation, Mr. President, is measured in S.J. Res. 352. Joint resolution desig­ nating October 1984 as "National tober 1984 as "National Head Injury human terms. If we wait for the judi­ Awareness Month." I ask unanimous cial process to take its course, the 21 Head Injury Awareness Month"; to the Committee on the Judiciary, consent that this joint resolution be ADEA cases now pending in the printed in the RECORD. second circuit are jeopardized. Each of NATIONAL HEAD INJURY AWARENESS MONTH There being no objection, the joint those cases involves the employment e Mr. DANFORTH. Mr. President, resolution was ordered to be printed in rights of older Americans, who by law today I am introducing a joint resolu­ the RECORD, as follows: were guaranteed the opportunity to tion on behalf of myself and Senator have their grievances heard in a court KENNEDY to designate October 1984 as S.J. RES. 352 Whereas an estimated four hundred and of law. "National Head Injury Awareness fifty thousand to seven hundred thousand Furthermore, the second circuit's de­ Month." people require hospitalization each year for cision could have negative conse­ Recent estimates indicate that over head injuries; quences on the 150 ADEA cases pend­ 100,000 Americans die from head inju­ Whereas an estimated one hundred thou­ ing in other circuit courts nationwide. ries every year. Most of these tragic sand of these victims die as a result of head mtimately, failure to restore the deaths are caused by motor vehicle or injuries; EEOC's enforcement authority means sports accidents. In addition, each year Whereas approximately fifty thousand that 28 million older Americans would 450,000 to 700,000 people sustain head head injury victims, more than two-thirds of whom are under the age of thirty, suffer be without legal protection against age injuries serious enough to require hos­ permanent brain damage that prevents discrimination in employment. I might pitalization, and 50,000 of these indi­ them from returning to schools, jobs, or add, Mr. President, that the court rec­ viduals are permanently disabled. normal lifestyles; ognized the potential harm that could These victims suffer permanent brain Whereas the effects of head injuries are result from its decision and, therefore, damage that prevents them from re­ emotionally and financially devastating to stayed filing its decision until Decem­ turning to schools, jobs, and normal families; ber 31, 1984, suggesting that this lifestyles. The tragedy of this situa­ Whereas there is a serious lack of facili­ would give Congress an opportunity to tion is increased by the fact that two­ ties designed to care for the special needs of the head injured; and enact corrective legislation. This bill is thirds of these disabled individuals are Whereas long-term medical research on just that, it will simply enact the reor­ young people, under the age of 30. brain-injured patients is incomplete: Now, ganization plan of 1978, thus protect­ These individuals permanently dis­ therefore, be it ing the authority of the Commission abled by head injuries are left with Resolved by the Senate and House of Rep­ to enforce the ADEA, the Equal Pay mental and physical impairments, resentatives of the United States of America Act, and section 501 of the Rehabilita­ speech problems, and behavioral disor­ in Congress assembled. That October 1984 is tion Act of 1973, as wall as the author­ ders. Often these disabilities are not designated "National Head Injury Aware­ apparent to the causal observer, but ness Month" and the President is authorr ity of the Department of Justice to ized and requested to issue a proclamation bring suit under section 707 of title their effects are still debilitating. In calling on the people of the United States to VII of the Civil Rights Act of 1964, as many instances, the victims of serious observe that month with appropriate pro­ amended. head injury experience frequent fa­ grams and activities.e Mr. President, as you know the tigue, forgetfulness, irritability, and Senate Aging Committee has had a depression that make it extremely dif­ By Mr. BYRD: longstanding interest in policies and ficult or impossible from them to S.J. Res. 353. Joint resolution to des­ legislation that promote continued maintain a job or attend school. ignate the week of February 3, 1985, September 11, 1984 CONGRESSIONAL RECORD-SENATE 24779 through February 9, 1985, as "Nation­ parents, teachers, administrators, communi­ S.2380 al School Guidance and Counseling ty leaders, school board members, and legis­ At the request of Mr. HEINz, the Week"; to the Committee on the Judi­ lators; and name of the Senator from Maryland ciary. Whereas it is appropriate to recognize the dedicated individuals who serve as profes­ [Mr. SARBANEsl was added as a cospon­ NATIONAL SCHOOL GUmANCE AND COUNSELING sional counselors in the schools of the sor of S. 2380, a bill to reduce unfatr WEEK Nation: Now, therefore, be it practices and provide for orderly trade Mr. BYRD. Mr. President, I am Resolved by the Senate and House of Rep­ in certain carbon, alloy, and stainless today introducing a joint resolution to resentatives of the United States of America steel mill products, to reduce unem­ designate the week beginning Febru­ in Congress assembled. That the week of ployment, and for other purposes. ary 3, 1985, as "National School Guid­ February 3, 1985, through February 9, 1985, ance and Counseling Week." is designated as "National School Guidance s. 2576 Founded in 1953, the American and Counseling Week", and the President is At the request of Mr. BINGAMAN, the School Counselor Association is an or­ authorized and requested to issue a procla­ name of the Senator from Florida mation calling upon all public officials and [Mrs. HAWKINs] was added as a co­ ganization which serves its members the people of the United States to celebrate and the public through programs that such week with appropriate ceremonies and sponsor of S. 2576, a bill to establish a advance guidance and counseling in all activities. commission to study and make recom­ school settings: elementary, middle/ mendations concerning the interna­ junior, secondary, and postsecondary. tional trade and export policies and The theme of the sixth annual ob­ ADDITIONAL COSPONSORS practices of the United States. servance of "National School Guid­ s. 2768 ance and Counseling Week" is "School s. 1128 At the request of Mr. LEAHY, the At the request of Mr. MATHIAs, the Counseling: the Human Connection." name of the Senator from Connecticut This theme emphasizes the special name of the Senator from Connecticut [Mr. DoDD] was added as a cosponsor [Mr. WEICitER] was added as a cospon­ role school counselors fulfill in help­ sor of S. 2768, a bill to provide for the ing to meet the needs of students and of S. 1128, a bill entitled the "Agricul­ tural Productivity Act of 1983." education in the United States of cer­ their families. Counselors are an es­ tain students of limited financial sential part of the education team. s. 1746 Working with teachers, administra­ At the request of Mr. RUDMAN, the means from developing countries. tors, and special services personnel, name of the Senator from Illinois [Mr. s. 2770 counselors provide students academic PERCY] was added as a cosponsor of S. At the request of Mr. MELcHER, the assistance in selecting programs of 1746, a bill to require that the Federal name of the Senator from Arkansas study. This is important in helping Government procure from the private [Mr. PRYOR] was added as a cosponsor students meet their future career sector of the economy the goods and of S. 2770, a bill to protect consumers goals. Counselors also work with stu­ services necessary for the operations and franchised automobile dealers dents to help develop personal skills, and management of certain Govern­ from unfair price discrimination in the such as decisionmaking and self-aware­ ment agencies and that the Director of sale by the manufacturer of new ness, and to generally assist our young the Office of Management and Budget motor vehicles, and for other pur­ people in the difficult process of ma­ and the Comptroller General of the poses. turing-growing up. United States identify the activities of s. 2869 During "National School Guidance the Federal Government to produce, At the request of Mr. LEAHY, the and Counseling Week" let us join to­ manufacture, or otherwise provide names of the Senator from Hawaii gether to focus public attention on goods and services which should be [Mr. INOUYE], the Senator from Illi­ guidance and counseling programs and provided by the private sector and pre­ nois [Mr. PERcY], and the Senator increase the understanding of the pare a schedule for transferring such from West Virginia [Mr. RANDOLPH] public regarding the importance of activities to the private sector. were added as cosponsors of S. 2869, a these programs to our children. I urge s. 1747 bill to amend the Internal Revenue my colleagues to give this resolution At the request of Mr. A..ru\(sTRONG, Code of 1954 to provide an income tax their full consideration and complete the name of the Senator from Hawaii credit for expenses incurred by an in­ support. [Mr. INOUYE] was added as a cosponsor dividual taxpayer for the purchase of I ask unanimous consent that the of S. 1747, a bill to amend title 38, television subtitle equipment to be full text of the joint resolution be United States Code, to establish two used by a hearing-impaired individual. printed in the RECORD. new programs of educational assist­ There being no objection, the joint s. 2894 ance for veterans of peace time serv­ At the request of Mr. MELcHER, the resolution was ordered to be printed in ice, to close the Post-Vietnam Era Vet­ the RECORD, as follows: name of the Senator from Nebraska erans' Educational Assistance Program [Mr. ExoN] was added as a. cosponsor S.J. RES. 353 to new participants, and to repeal the Whereas there are approximately seventy of S. 2894, a bill to amend the Internal December 31, 1989, termination date Revenue Code of 1954 to clarify the thousand professional counselors working of the Vietnam-era GI bill, and for with the teachers and other educational application of the imputed interest personnel of the Nation; other purposes. and interest accrual rules in the case Whereas professional counselors are in­ s. 2139 of sales of residences, farms, and real strumental in the mental development and At the request of Mr. HEINz, the property used in a trade or business. academic and career planning of the stu­ name of the Senator from Kentucky s. 2917 dents of the Nation; [Mr. HUDDLESTON] was added as a co­ Whereas guidance and counseling pro­ sponor of S. 2139, a bill to improve the At the request of Mr. TsoNGAS, the grams enable students to learn essential life names of the Senator from Maine [Mr. skills, and thus benefit society by producing operation of the countervailing duty, MITCHELL], the Senator from Alabama better prepared adults; antidumping duty, import relief, and [Mr. HEFLIN], the Senator from Alaska Whereas professional counselors are an in­ other trade laws of the United States. [Mr. MURKOWSKI], the Senator from tegral part of the educational process of the s. 2266 Nation; New Hampshire [Mr. HUMPHREY], the Whereas national and community efforts At the request of Mr. CRANSTON, the Senator from Connecticut [Mr. DoDD], are needed if guidance and counseling pro­ name of the Senator from Massachu­ and the Senator from Rhode Island grams are to be effective; setts [Mr. KENNEDY] was added as a [Mr. CHAFEE] were added as cospon­ Whereas support for counseling programs cosponsor of S. 2266, a bill to grant a sors of S. 2917, a bill to confer citizen­ is needed from ind!viduals who take actions Federal charter to Vietnam Veterans ship posthumously on Corporal Wla­ that significantly affect children, such as of America, Inc. dyslaw Staniszewski. 24780 CONGRESSIONAL RECORD-SENATE September 11, 1984 SENATE CONCURRJ:NT RESOLUTION 94 of the Roth-Tsongas resolution on Congress should recognize it and At the request of Mr. MoYNIHAN, the South Africa. expose it. name of the Senator from California We have observed events unfolding [Mr. CRANsToN] was added as a co­ in South Africa in recent weeks and sponsor of Senate Concurrent Resolu­ we are quite frankly shocked at what SENATE RESOLUTION 440-RE­ tion 94, a concurrent resolution ex­ we have seen. The Government in LATING TO MODIFYING THE pressing the sense of Congress that South Africa has gone to great lengths UNITED STATES-SOVIET UNION the president of Syria should permit to sell a series of constitutional GRAIN AGREEMENT Jewish emigration. changes as a program of multiracial Mr. BOREN (for himself, Mr. SENATE CONCURRJ:NT RESOLUTION 117 democracy. Two separate parliamenta­ BAUCUS, Mr. BENTSEN, Mr. BUMPERS, At the request of Mr. LAUTENBERG, ry bodies, we have been told, will allow Mr. BURDICK, Mr. EXON, Mr. LEAHY, the name of the Senator from Texas "Coloreds" and "Asians" to participate Mr. NICKLES, Mr. PRYOR, and Mr. ZOR­ [Mr. ToWER] was added as a cosponsor in the direction of national affairs. INSKY) submitted the following resolu­ of Senate Concurrent Resolution 117, But when the time came to measure tion; which was referred to the Com­ a concurrent resolution relating to the "Colored" and Asian support for these mittee on Foreign Relations: promotion of technological innovation changes, the Government resorted to in computer software and the protec­ the police state tactics it knows so well S. RES. 440 tion of computer software. to suppress peaceful political opposi­ Whereas the United States' surplus of grain remains at an unreasonably high tion to these so called democratic re­ level; SENATE CONCURRENT RESOLU- forms. Whereas the price U.S. farmers receive for TION 139-CONDEMNING On the eve of the elections to elect grain products is well below the full cost of SOUTH AFRICA'S ARRESTS "Colored" representatives to the new production; AND DETENTIONS OF POLITI­ parliament, some 200 leaders and ac­ Whereas American farmers are dependent CAL OPPONENTS tivists in the election boycott move­ on export sales for one-fourth of their income; Mr. ROTH The South African government should spurn racial justice. I think that many rently in effect; and immediately terminate its practice of arbi­ of my colleagues will want to join Sen­ (3) take all other appropriate actions to trary arrests and detention and should re­ ator RoTH and me in expressing provide for an increased quantity of U.S. ag­ lease those men and women who have been through this resolution our condemna­ ricultural products purchased by the Soviet arbitrarily imprisoned and having ex­ tion and dismay over these actions of Union. pressed, publicly and peacefully, their politi­ the South African Government. It is a e Mr. BOREN. Mr. President, on cal preferences. pernicious order of injustice for a behalf of Senators BAUCUS, BENTSEN, Mr. TSONGAS. Mr. President, I am regime to oppress its people; but to op­ BUMPERS, BURDICK, EXON, LEAHY, proud today to join with my eminent press in the name of "multiracial de­ NICKLES, PRYOR, ZORINSKY, and colleague from Delaware as coauthors mocracy" is a cynical sham and this myself, I am submitting a sense of the September 11, 1984 CONGRESSIONAL RECORD-SENATE 24781 Senate resolution which calls for the output in the U.S. economy and about chases of U.S. grain for delivery in President to immediately notify the 70 percent of this additional activity fiscal year 1985 already amount to 8.3 Soviet Union that additional amounts accrues to nonfarm sectors of the million metric tons, and the purchases of U.S. grain, above the 12 million economy. could exceed 20 million metric tons­ metric ton maximum, may be pur­ Mr. President, we must take every nearly 12 million metric tons of com chased by the Soviet Union during the possible action to maintain and fur­ and 8 million metric tons of wheat. second year of the current long-term ther develop our existing markets. If Soviet imports total nearly 45 mil­ grain agreement. The resolution fur­ One obvious way to do this is to take lion metric tons, as expected, the ther calls for the President to seek to better advantage of the Soviet market. United States has the opportunity to modify the agreement by establishing Regular U.S. and Soviet long-term capture just under 50 percent of the higher minimum and maximum agreement consultations are scheduled Soviet market. Certainly, if Soviet pur­ supply guarantees. I ask unanimous for mid-November. There is no reason chases peak at 50 to 55 million metric consent that the text of the resolution why we should wait until November to tons, as projected on the high side, the be printed in the RECORD at the con­ secure additional purchases of U.S. U.S. share will be even greater because clusion of my remarks. grain by the Soviet Union. For the of the readily available surplus of We are facing a crisis in the export past 10 weeks, the Soviets have been grain in the United States. of U.S. agricultural products which making unusually large purchases of These expected purchases will only must be recognized and reversed. The U.S. grain. In fact, the Soviet Union be possible if this administration continued strength of the dollar is has already arranged for delivery, heeds the President's campaign rheto­ placing our agricultural commodities before January 1, 1985, of the mini­ ric and extends the limits on the long at a competitive disadvantage to other mum level of grain provided for under term grain agreement. Formal assur­ countries that export agricultural the second year of the long-term ance will be necessary to promote ad­ commodities. Year after year, we are agreement. Under the long-term agree­ ditional sales because of the distrust­ experience a decline in both volume ment, the Soviet Union cannot make ful nature of the Soviets. If such an and value of agricultural exports. purchases in excess of 12 million assurance is immediately given, the In fiscal year 1983, total U.S. farm metric tons in any agreement year United States may avoid driving the product exports totaled $34.8 billion, without consulting first with the Soviets into markets of competitor na­ 11 percent less than a year earlier. United States. tions. The value exported in fiscal year 1983 It is imperative that we act now I would also like again to urge the represents approximately a 21-percent while the Soviets are on a buying administration to seek the inclusion of reduction when compared to the value spree. We should immediately notify rice in our long term grain agreement of products exported in fiscal year the Soviets that we are willing to pro­ with the Soviets. Currently, over 22 1981. For fiscal year 1983, alone, this vide for purchases of grain in excess of million hundredweight of rice is in decrease in value resulted in a 22-per­ the 12 million metric ton maximum. Government storage, and the extreme­ cent decrease in the agricultural trade Further, we should seek to modify the ly low rice prices, as we move into rice surplus. long-term agreement by establishing harvest, assure that millions more In fiscal year 1983, the volume of higher minimum and maximum hundredweight of rice will likely end U.S. agricultural products exported de­ supply guarantees than are currently up in Government storage. A signifi­ clined by 8 percent. When compared in effect. The resolution we are sub­ cant contributing factor is the admin­ to fiscal year 1981, the level of prod­ mitting today expresses the sense of istration's failure to help us maintain ucts exported in fiscal year 1983 were the Senate that the President should our foreign rice markets in the face of 11 percent lower. According to USDA, take these actions now in order to foreign competition, and the inclusion agricultural export volume is expected maintain and further develop this im­ of rice in the LTA would help open a to decline again this year, marking the portant market.e major new market to our embattled 4th consecutive year of decline. • Mr. BUMPERS. Mr. President, I am rice farmers. Over the last several The U.S. share of the export market pleased today to join with Senator years Soviet imports of rice have aver­ was 48 percent in 1981-82. With the BoREN as an original cosponsor of the aged 800,000 metric tons a year, and current decrease in American partici­ resolution urging the President to none of this rice comes from the pation in the world export market, it begin immediate consultations with United States. seems that the figures will continue the Soviets for the purpose of giving For the sake of our grain farmers, falling depreciatively, to below the formal notification of the raising of many who are not likely to survive in 1983-84 level of 38 percent. export limits set under the long term farming without drastic grain price This alarming trend must be re­ grain agreement. With current grain improvements, I urge the President to versed. A depression in the agricultur­ prices severely distressed, greater raise the LTA limits, and I call on my al export market inevitably has an im­ Soviet purchases throughout fiscal colleagues to help impress upon the pressive impact at home. Exports help year 1985 may be the only significant President the severity of this need.e farmers make the most efficient use of positive event affecting our grain their resources and keep costs lower, market. enabling U.S. consumers to spend a For fiscal year 1984, this administra­ AMENDMENTS SUBMITTED smaller share of disposable income on tion agreed to raise the export limit food than consumers in other nations. from its negotiated level of 12 million If production had to be reduced to the metric tons. Grain shipments to the TELEVISION AND RADIO IN THE level of domestic demand alone, farm­ Soviet Union are projected to exceed SENATE ers would have no choice but to allo­ 13.3 million metric tons by September cate fixed costs to the remaining 30 and the Soviets are attempting to output. This could increase unit costs arrange as great a quantity as possible to American consumers substantially. for September delivery because of the RANDOLPH AMENDMENT NO. Not only do agricultural exports pro­ failure of this administration to 3754 vide American consumers with a good extend the LTA limits for next year. food bargain, they also provide jobs. Yet, if the Soviet grain harvest falls Mr. RANDOLPH submitted an amend­ The U.S. Department of Agriculture below 170 million metric tons, as many ment intended to be proposed by him estimates that for every $1 billion of experts are suggesting, then the to the resolution When yeas and nays are ordered on For me this life source starts from the floor, each Senator shall vote from the Marian, my wife, and our children. who assigned desk of the Senator.". FORMER SENATOR JACOB have been my basic support, and extends to JAVITS COMMENTS ON THE relatives and friends, country, and the QUALITY OF LIFE world. But I have also been sustained by my FINANCIAL SERVICES doctors, who in diagnosing my case always COMPETITIVE EQUITY ACT • Mr. WEICKER. Mr. President. it is gave me two assurances: that I would be with great pride that I submit for the continent, and that my intellectual capac­ REcoRD an article written by our ities would be unaffected. Despite my handi­ TOWER AMENDMENT NO. 3755 friend and former colleague, Senator caps, I can speak, see, hear, taste, smell, Jacob K. Javits. I also am submitting a feel, even swallow . No Mr. ToWER submitted an amend­ matter how my other faculties might suffer, ment intended to be proposed by him summarizes a speech given by Jack to the use of my brain seems assured This, it to the bill until that goal is reached, I believe the med­ 1, 1984. I am a victim of what is generally called a ical profession should cooperate with efforts terminal disease. It is amyotrophic lateral to establish a test in cases of terminal ill­ sclerosis . which slowly disables mus­ ness that would enable us to determine who AUTHORITY FOR COMMITTEES cles by reducing the ability of the motor should live and who should die. It should be TO MEET neurons-the nerves that control move­ based not on how rich the patient and his ment-to deliver chemical messages from family are, but on whether the brain is COIDIITTEE ON GOVERNKENTAL AFFAIRS the brain to those muscles. ALB is usually a functioning and whether there is any expec­ Mr. BAKER. Mr. President. I ask disease of middle age and thereafter, and tation that the patient will continue to unanimous consent that the Commit­ more men than women seem to get it. It is enjoy what is truly life. tee on Governmental Mfairs be au­ not considered contagious. It is popularly This can best be done by a process that in­ thorized to meet during the session of known as Lou Gehrig's disease, because it volves the participation of the patient, the the Senate on Tuesday. September 11. killed the great baseball player while he was patient's family, a representative of the pa­ to consider the following nominations still in his thirties. There is no known cure. tient's religious affiliation, a representative for Associate Judge of the Superior I am now confined to a wheelchair, be­ of the community, and, of course, the medi­ cause my leg muscles are inadequate, and I cal profession-and ultimately, if the issue Court of the District of Columbia: need a ventilator to help me breathe, is not resolved, the judgment of a court. But Susan Holmes, Rufus King, Colleen though it uses only room air. The critical I believe that the criterion must be the abil­ Kollar-Kotelby. A. Noel Kramer, thing in keeping alive, in my estimation, is ity of the brain to function-for that is life, Emmett Sullivan. Robert Tignor, and to keep my mind in order and functioning. as distinguished from death. Even when Robert Richter. Fortunately, ALB does not seem to compro­ continuous excruciating pain is present, we The PRESIDING OFFICER. With­ mise the brain or the intellectual ability of have every reason to hope that advances in out objection. it is so ordered. the stricken individual. the control of pain may help us continue to When I received the news that I had this consider the functioning brain as the rule SELECr COMMITTEE ON INTELLIGENCE difficult disease after a long and active for life. Mr. BAKER. Mr. President. I ask career as a lawyer, Army officer, state attor­ Based upon what I have been through, I unanimous consent that the Select ney general, and a member of Congress, I have found that medical care is generally Committee on Intelligence be author­ could have been devastated and destroyed. administered with good intentions to those ized to meet during the session of the But I was not. I decided I would simply have with terminal illnesses, and that an atmos­ Senate on Tuesday. September 11. at 2 to make the best of it. Throughout my med­ phere of good will pervades medical offices ical experience, this philosophy has always and hospitals. I believe it is also fair to say p.m.. to receive a closed-session brief­ prevailed: that I had a job to do and a life to that the patient should have a lot to do ing on intelligence matters. finish, and that no physical obstacles could with the treatment, however limited it may The PRESIDING OFFICER. With­ stop me in the pursuit of what I considered be. For if he is cooperative, optimistic, and out objection. it is so ordered. to be my duty and responsibility to my communicative to the doctor and other COMMITTEE ON THE JUDICIARY people and my time. health professionals, he will inspire the Mr. BAKER. Mr. President, I ask Therefore, for patients with a so-called total medical staff, and this can have a lot unanimous consent that the Commit­ terminal illness like ALS, my message is to do with the results. this: We are all terminal and we are all A friend of mine, Norman Cousins, a dis­ tee on the Judiciary be authorized to going to die sometime. So why should a ter­ tinguished author and editor who suffered meet during the session of the Senate minal illness be different from a terminal some years ago from what he thought at on Tuesday, September 11, 1984, in life? There is no difference, and I would sug­ the time was a terminal illness, has given us order to receive testimony concerning gest that the most positive thought for any all a message in that respect. Humor was the FCC 7-7-7 Rule. patient is to concentrate on perpetuating the single factor that helped him most, and September 11, 1984 CONGRESSIONAL RECORD-SENATE 24783 he demonstrated that the patient can con­ Mr. Javits said the most important point grace of these infirmities;" Mr. Javits said. tribute as much as the doctor or the nurse in staying alive was to "keep my brain in "It was a vivid illustration of the psycholog­ to a happy outcome, and can make life order and functioning." He added, "This is ical impossibility for him, a handsome man much easier for the people who function the essence of life." with a vivid personality, to accept the limi­ within the health care or hospital setting. The disease has not affected Mr. Javits's tations that his disease imposed upon him." We have made a lot of progress in this mental abilities but it has led to striking The conference at which Mr. Javits ap­ country in the quality and the availability weakness of the muscles below his neck. He peared is known as medical grand rounds. In of health care, but we still have a long way wears a supportive collar to prevent his past decades, when medical costs were much to go. I am very proud of what we have head from sagging and thereby further lower than they are now, patients often done, especially because most of it is in the interfering with his ability to breathe. That stayed in the hospital so they could be private sector, which always gives greater difficulty, his doctors said, was due entirely present when their case was discussed.e freedom and greater opportunity to the in­ to the muscle weakness resulting from the dividual. I believe, too, that there is a grow­ damaged nerves. ing body of opinion in the health care pro­ KEEPS A FULL SCHEDULE THE REAL COST OF THE PHILIP fessions that has helped to move this proc­ ess on its way, and that this is an expression Although it takes him three hours in the A. HART SENATE OFFICE of social consciousness among the members morning to prepare for the day, Mr. Javits BUILDING said, he has written many articles, delivered of the health care professions. Though this EXECUTIVE SUlDlARY attitude is far from universal, I am sorry to commencement addresses, received awards say, it is nonetheless impressive and very and testified before his former colleagues in e Mr. JOHNSTON. Mr. President, the promising for the future. Congress about the need for more basic re­ press has carried so many stories Now a few observations on my own life as search in his disease and others. about the extravagance and exorbi­ a "sick man," which may be helpful to Mr. Javits said in an interview that his tant costs of the Hart Senate Office others carrying comparable serious disabil­ medical bills totaled "upward of $50,000 a Building that it has become conven­ ities. I do lecture, I do read, and I do write. I year," and that they were paid by three tional wisdom that the Hart Building dedicate my life to the issues that have health insurance pollees and from his own is among the costliest Federal build­ dominated it for many decades now, and to pocket. my profession as a lawyer. I believe that I Mr. Javits said he was upset when he ings ever built. The facts show other­ can still be useful in many ways. heard reports of remarks by Gov. Richard wise-the Hart Building's cost growth In short, life does not stop with terminal D. Lamm of Colorado recently, remarks was relatively modest compared with illness. Only the patient stops if he does not that he and others interpreted as "urging similar structures built in the same have the intellectual and moral wherewithal older people with terminal illness to get out period of high inflation. Its actual per to go forward with life until death overtakes of the way and leave medical care for square foot construction cost is far less him. That happens to everybody. We can be younger, more vital subjects." than many corporate headquarters inspired by our disabilities and carry on But Mr. Javits also said that he felt that what is truly life, or we can be dismayed and Governor Lamm had "raised a question for and other modem buildings and, when downed by them. the profession of deepest gravity; it is true discounted for inflation, substantially The greatest therapy is to forget about that medical care is very expensive." less than other congressional buildings terminal illness. Everybody is terminal. Mr. Javits went on to lament that Ameri­ such as the Rayburn House Office That is the great message that can perpet­ cans had not established a system to deliver Building, as a full report on the con­ uate the useful life of the patient and be of health care to all. struction cost has disclosed. solace and comfort to the patient's family URGES LIFE-OR-DEATH TEST and friends. what is really worthwhile in life FOUR ERRONEOUS ASSUMPTIONS ABOUT THE is the excitement and the expectation of He called on doctors to develop a test "to HART COST living, and the giving and the receiving, enable us to determine socially who should Four fundamental fallacies are at which is, after all, life's essence. live and die." Such a test, he asserted, the center of the public misconception should not be based on such factors as age of the high costs of Hart: First, Hart DOCTORS HEAR JAVITS IN A SALUTE TO LIFE and the name of the ailment, "but on whether your brain is functioning, and I be­ was originally estimated to cost $48 craft and weapons procurement are up 57.5 ciate Architect, John Carl Warnecke A Democratic-controlled congressional percent, whereas munitions, training, and & Associates, initiated numerous cost subcommittee has issued a critical report other non-hardware procurement are up savings measures, for example, substi­ claiming that the readiness of U.S. fighting 100.8 percent. The Army's budget demon­ tution plaster for much of the marble, forces has deteriorated under the Reagan strates that munitions training, and other Administration. This report was convenient­ procurement has risen faster than weapon aluminum for bronze, and so forth, ly issued during an election year and systems. Weapon systems rose 69 percent which ultimately saved in excess of became a major issue for the Mondale cam­ while munitions, training and spares $30 million in construction costs. paign. jumped 85.2 percent. Only in the Air Force Thus, Hart emerges as a balanced Obviously, the political spectrum from Re­ did weapon systems procurement outpace building, by no means opulent. publican to Democrat differs greatly on this munitions, training and spares-rising 268 FUNCTIONAL DESIGN APPRECIATED BY issue-mainly supporting what is considered percent as compared to 230.1 percent. Pay OCCUPANTS best for their respective candidates. But raises have also been accomplished to in­ what truth is there to this biased congres­ crease morale and reenlistment, and to im­ The time has come for the "Taj sional report? prove the caliber of today's recruits. Mahal" myth of the Hart Senate Those who have issued the report claim Granted, in election years, the state of the Office Building to die. The Hart Build­ that the Reagan Administration has devot­ military is always subject to debate by the ing should be appreciated for what it ed too much to high-priced hardware­ "ins" and the "outs" of the political commu­ is-a highly functional building com­ ships, tanks, planes, and missiles-while ig­ nity-but for a congressional group who has patible with the monumental architec­ noring ammunition, spare parts, fuel, equip­ argued continually for cuts, who has forced ture on the Hill, well liked by its occu­ ment maintenance, and training. Defense reductions, to lie to the American people pants, which had the misfortune of Secretary Caspar Weinberger has accused about the serious question of defense pre­ the House Appropriations Subcommittee on paredness only re-enforces the important being constructed in a period of un­ Defense of issuing a "dangerously wrong" gains the Reagan Administration has made precedented inflation. It should be study. in the U.S. defense posture against some­ judged on its true costs and function, To defuse the issue, independent analysis times overwhelming odds. Mr. Mondale was not on its political mythology.e is necessary. Major improvements have been part of an administration that cut the de­ made toward the ability of U.S. forces to fense priorities drastically-and should wage war today as compared to 1980, accord­ know the real truth behind the growth of MILITARY READINESS ing to people like Gen. David C. Jones defense readiness in this nation. Such politi­ e Mr. GOLDWATER. Mr. President, ria for any voter intent on making an may be delayed, either until proletarian rev­ In his first official statement upon assum­ olution ripens in Europe or until the coloni­ informed decision this fall. ing office, Konstantin Chernenko offered al revolutions come fully to a head, or final­ The thrust of the Mondale plan is "peaceful coexistence" to the United States, ly, until the capitalists fight among them­ right on target. The savings the plan thus raising the question once again of the selves over the division of the colonies. would achieve would be applied to def­ definiton of Soviet doctrinal terms. Therefore, the maintenance of peaceful re­ icit reduction. The whole story of this One aspect of peaceful coexistence has lations with the capitalist countries is an year in Congress and throughout the been arms control negotiations, which have obligatory task with us." 24786 CONGRESSIONAL RECORD-SENATE September 11, 1984 INEVITABLE WAR Soviet Communist Party, Marshall Rodion or an air force, to violate these provisions of "Peaceful coexistence" is therefore inevi­ Yakovlevich Maltnovski's speech contained the treaty on Soviet son, out of the sight of tably to end in War. Who will start this the following passage: "We must ... also Allied inspectors. It was in Von Seeckt's war? According to Lenin, "If war is waged study means of foiling the aggressive de­ Soviet training camps that the Luftwaffe by the proletariat after it has conquered the signs of the enemy by inflicting a lightning and the panzer divisions were born. bourgeoisie in its own country and is waged blow on him at the proper moment [svoyev­ The second German invasion is 1941 was with the object of strengthening and ex­ remennol" . Pravda tried to preceded by a massing of Soviet troops close tending socialism. such a war is legitimate put the cat back in the bag on Feb. 23, 1964, against the German-Soviet demarcation line and 'holy' " . by changing this to a "lightning blow in that was so alarming that Berlin cabled its "The Social Democrats [the old name of the return." But on Jan. 21, 1974, Richard Ivan­ ambassador, Count Werner von der Schu­ Communists] may even find themselves in ovich Kosolapov, now editor of Komunist, lenburg, in Moscow and asked if the USSR the position of having to demand agrressive wrote in Pravda that "constructive peaceful intended to attack. Von der Schulenburg re­ wars" . "We must coexistence . . . by no means signifies the plied that they did not, that it was just Sta­ say that the party congress commissions the termination of the class struggle in all its lin's idea of 300 percent security. Whatever Central Committee to denounce all peace forms ... :• Earlier, Marshal Vasili Danllo­ the facts about who was about to invade treaties and to declare war on every imperi­ vich Sokolovski, in his Voyennaya Strate­ whom, Moscow again seemed to be curiously alist state and on the whole world as soon as giya, 1968, p. 26, had asserted that the free of paranoia: following the war, the So­ the Central Committee regards the moment "highest form of class struggle" is "war be­ viets were even inducting surrendered SS­ as appropriate" East Germans to introduce military training ently it is not so dlsm.tssed in Moscow, how­ display a fascination with surprise attack, in the high schools, matching the militariza­ ever. Gen. Yevdokim Yegorovich Maltsev, but Maltnovsk's indiscretion, amended for tion of Soviet youth. writing in Krasnaya Zvezda on Feb. 14, foreign consumption, implies that surprise The notion that Moscow fears invasion by 1974, asserted that: even then was not easy to achieve-the the Germans or by any nation is in any case "The defense might of the USSR is grow­ "means" to achieve it had to be "studied.'' belted by the offensive deployment of its ing stronger on the basis of Leninist ideas Peace has therefore been due partly to west­ armies. Their ammunition dumps, for exam­ and on Lenin's doctrine on the defense of ern surveillance and intelligence networks, ple, are close to the border with the West, the socialist homeland. Wholly guided by which makes it almost impossible to prepare where they would be overrun in the first this doctrine, our party adopts a creative ap­ a first strike "lightning blow" on a scale suf­ few hours of a NATO attack. proach to the complex problems ficient to ensure victory. Over the years the USSR has howled of ... defense capability in strict conformi­ A Soviet attack would have to be on a abuse at purely defensive measures of the ty with the particular features of a given large, and hence detectable, scale because of western countries, probably striving to in­ stage of social development and the world the West's military strength. Western arma­ spire a numbing fear by advertising western situation. . . . Events of the present stage ments have therefore prevented the only measures that pre-suppose retreat. In the of social development are approaching the kind of war that assures victory to the ag­ 1950s, they pointed to the chambering of point where at any moment a situation may gressor. Nuclear weapons are part of that West German bridges to facilitate their arise in some link of the capitalist system strength. In the 1960s, Soviet military writ­ demolition in the path of the expected which will pave the way for revolutionary ers dismissed the idea that nuclear weapons Soviet advance and later the planting of nu­ transformations." changed the nature of war "as bourgeois clear mines in the passes of the Erzgebirge. Given Lenin's emphatically aggressive in­ ideologists assert." Such weapons were just Radio Moscow even denounced the sending tention and the abuse to which the word artillery of greater explosive force. of German Leopard tanks far away to "defense" has been subjected even by "bour­ But the increasing power and diversifica­ Spain, where they could hardly launch an geois" states, it would be unwise to take tion of nuclear weapons gave rise to doubts attack against the East, but could be used much comfort from its use here. As the and, recently, to admission of the possibility very easily to seal the gorges of the Py­ Sixth World Congress of the Comintern in that a great war might be fought without renees. The campaign against neutron weap­ 1928 put it: "There is no contradiction be­ using them at all. If, as Robert McNamara ons is the latest example. tween the Soviet government's preparations wrote in the fall 1983 issue of Foreign Af­ NUCLEAR WEAPONS for defense and for revolutionary war and a fairs, the sole purpose of a nuclear arsenal is to deter the adversary from using his ar­ If strategic nuclear weapons are militarily consistent peace policy. Revolutionary war useless as McNamara claims, why do not the of the proletarian dictatorship is but a con­ senal, then each arsenal cancels the other out, with the possible exception of small Soviets agree to their abolition, thus saving tinuation of revolutionary peace policy 'by enormous expense? Because they are of other means.' " tactical devices used in sparsely inhabited areas or at chokepoints like the Rhine cross­ enormous political use, as the Soviets began The continuing validity and immutability to realize in the 1960s, when the Communist of Leninist war doctrine is sometimes pro­ ings or the Pyrenees passes. But this en­ hances the possibility of war. Once nuclear Santiago Alvarez, writing in the World claimed in the USSR so sharply that one Marxist Review in June 1963, noted: might suspect that Soviet "doves" are fran­ weapons are swept from the chessboard, the Soviet proletariat may once again be able to "Acute political crises may give rise to rev­ tically trying to warn a bemused West that olutionary situations in the western coun­ it is in mortal peril. The idea that "peaceful "fulfill its international duty" across fron­ tiers, not in Afghanistan, but in Europe or tries. We have in mind such things as a coexistence" might be permanent has been sharp deterioration of international rela­ repeatedly denounced as "unscientific": "It the Middle East. The vast coventional arma­ ment of the USSR seems to indicate that its tions fraught with the danger of nuclear is clear that there can be no continuing, war.... It may well be that any immediate 'eternal' coexistence of socialist and capital­ leaders never gave up hope that convention­ al war might some day again be possible. danger of nuclear war would cause a ist states. To advance such a demand means leftward swing among the masses.... " to reduce the principle of peaceful coexist­ PAST INVASIONS He was echoed by Pravda on August 13 of ence to absurdity," wrote D. Aleksandrov in Why 42,600 tanks and 176 divisions ? A cur­ through highly publicized speeches, to pro­ Otnosheniya, XI, 1963. rently popular explanation is paranoia in­ voke the necessary terror with lurid visions "Peaceful coexistence" in Moscow's view is duced by past invasions, particularly by of accidental missile launchings caused by a therefore no more than a state of uneasy ar­ Germany. Let us examine these invasions. "flock of geese" trated nuclear nightmare, we must spend and American workers-many of them reminded Soviets that "The bourgeois-pact­ years educating the Soviets using all avail­ fist attitude toward war which stresses the able media on the apocalyptic doctrine of women and minority workers-have 'horrors of war' and inculcates hatred of all the Communist Party and on the superflu­ benefited measurably. The American wars is alien to us. Communists are against ity of the armaments that keeps them in Telephone Co., for example, reports impertallsttc wars as being counterrevolu­ unending poverty, even at the expense of that 85 percent of its nonmanagement tionary wars, but they are in favor of liber­ the latest trends in jazz and sports.e employees who earned degrees ating, anti-imperialist, revolutionary wars." thought AT&T's tuition assistance While suppressing at home films and liter­ program have moved into manage­ ature that dwell on the horrors of war, the EMPLOYEE EDUCATIONAL Soviet government encourages them abroad, ASSISTANCE EXTENSION ACT ment positions. on one occasion even lending troops of the e Mr. MOYNIHAN. Mr. President, I The employee educational assistance Czechoslovak army as extras in an Ameri­ rise today to speak about an important provisions of the Tax Code also have can television remake of Erich Maria Re­ and worthy proposal, the Employee been responsible for retaining many marque's classic AU Quiet on the Western Educational Assistance Extension Act, thousands of America's industrial Front. s. 249. workers. If we are to compete with our From the age of seven, Soviet children are This legislation would extend the trading partners, American industry given mtlltary tratntng; when I was in must retool and update its manufac­ Moscow, 15 million children took part in the employee educational assistance provi­ annual field maneuvers of the "Children's sions of the Internal Revenue Code of turing technology. This process leaves Army," also known as Zamitsa. 1954. In 1978, Congress opened the many unskilled workers ill-prepared CIVIL DEFENSE classroom door to thousands of Ameri­ for increasingly complex jobs. Section Many members of antinuclear groups in can workers by adding section 127 of 127 of the Tax Code has helped many the West are puzzled and worried by the the Tax Code and thereby providing of these workers to adapt to new tech­ vast Soviet civil defense program, which ap­ tax incentives for employers to pay for nology by learning new skills. In the pears to contradict their firmly held belief the further education of their employ­ end, this saves American jobs. Section that there is no effective defense against ees-regardless of whether or not that 127, then, has been an invaluable nuclear attack. Perhaps they are right, but education was, as under prior law, nar­ hedge against unemployement and, at they forget the political value of the Soviet rowly defined as job-related. the same time, has helped American civil defense program, which by instilling a business train American workers to probably false sense of security, immunizes Section 127 has provided new oppor­ the Soviet people against any spillover of tunities for the advancement of compete with foreign labor. the nuclear terror being drummed up women and minority workers, im­ Employee educational assistance is abroad. proved America's competitiveness, and also vital to our efforts to improve Bilateral nuclear disarmament will not contributed to the general enlight­ America's educational system. Just 1 take place until Moscow loses more domesti­ ment of the American public by en­ year ago, the President's Commission cally than it gains abroad by maintaining couraging employers to provide tax­ on Excellence in Education declared the nuclear threat. Discouraged by jamming that the Nation is "at risk" due to a and censorship from any serious attempt at free educational fringe benefits to educating Soviet public opinion, we have their employees. nationwide decline in educational contented ourselves with broadcasting jazz, Over 7 million employees have been standards. literary comment, politically uplifting hom­ able to further their educations and One answer, the Commission sug­ lies and the news. The great mass of Sovi­ improve their job skills as a result of gested, was to expand resources to im­ ets has no idea of the war doctrine of the the employee educational assistance prove the quality of teaching at all Communist Party, nor do even most Soviet provisions of the Tax Code. Because levels. The employee educational as­ officials know of the enormous preponder­ these provisions expired in December sistance incentive is important in this ance of Soviet conventional forces. It is surely evidence of neglect on the West's of 1983, employer-provided education­ effort, as it enables school systems and part that even Soviet negotiators must be al assistance, such as the payment of universities to offer teachers new op­ given the most elementary information by tuition, is no longer considered exclud­ portunities for intellectual growth. their western counter-parts on the strength able from an employee's income, Section 127 has enabled many under­ and deployment of their own armed forces. unless the employee takes courses that paid teachers to take courses they oth­ One representative of a Soviet bloc country are directly related to his job. S. 249, erwise would be unable to afford and once asked me, during a negotiation, for in­ of which I am proud to be a cosponsor, then bring what they learn to their formation on his own country's armed would extend these employee educa­ students and colleagues. forces. Noting my startled expression, he added, "Nothing secret .... just a maga­ tional assistance provisions and make Educational assistance benefits also zine article, ltk.e those in the U.S. News and them a permanent part of the Tax are an important tool to help educa­ World Report." Code. tional institutions attract quality WITHHOLDING INFORMATION Congress broadened the employee teachers. A school district or college There must be a good reason why the educational assistance incentives in which cannot provide their teachers Kremlin keeps such information from its 1978 because the prior requirement higher salaries may, still, be able to people and from its diplomats. If awareness that only assistance for job-related offer tax-free tuition assistance. The spreads that the USSR has about 29,000 courses could be excluded from em­ National Educational Association esti­ tanks more than "aggressive" NATO, the ployee income precluded many non- mates that almost 60 percent of all 24788 CONGRESSIONAL RECORD-SENATE September 11, 1984 school districts in my home State of understanding of the people of our granddaughters. She has been passing New York offer educational assistance Nation and the artistic skills they these deep traditions to others of 50 benefits to their teachers. value," she told us. years. In addition, the distinguished former Hers is a most worthwhile program Today Aunty Kau'i serves as a model Congressman John Brademas, now in support and recognition of folk art of purity and classicism for hundreds president of New York University, has in our national culture. "We have been of younger artists of all races and, informed me that some 70 percent of as unbureaucratic as a Federal agency indeed, from other parts of the world. NYU graduate and teaching assistants can be in making guidelines for nomi­ During World War II she was asked to have received some sort of tuition as­ nations for these fellowships," she teach the hula to servicemen and sistance under section 127, assistance wrote. "They are no forms. Any citizen women in order to provide recreational which will no longer be available to at­ can send in a nomination. The evalua­ release. She recalls instructing at all tract talented scholars unless Congress tion process is rigorous, but we have the military posts on Oahu, including extends section 127. left the door open to all the keepers of Pearl Harbor, and sometimes had as Mr. President, the educational assist­ American folk traditions.'' many as 500 in a class. ance benefits provided under section The representative of my own State Learning the hula was a natural ex­ 127 of the Tax Code not only contrib­ among those honored this year is the tension of her early life, a life steeped. ute to American commerce, they also "kumu hula" or Hawaiian dance in Hawaiian cultural tradition. Her are vital for an informed and enlight­ teacher affectionately known as Aunty grandfather, a teacher of Hawaiiana, ened American public. Thomas Jeffer­ Kau'i. Some of us may have seen her and her grandmother, a local author­ son, as ever, was right to observe that perform the traditional hula of the ity in herbal Hawaiian medicine, American liberty depends on an edu­ Hawaiian, together with her daughter trained her to read the Bible in Hawai­ cated electorate. In 1816, Jefferson Noenoe and granddaughter Hauoliona­ ian. Now at 75 she continues to pro­ warned: "If a nation expects to be ig­ lani, on the National Mall earlier this vide continuity in the preservation of norant and free, in a state of civiliza­ summer as participants in the 18th Hawaiian cultural tradition and young tion, it expects what never was and Annual Festival of American Folklife people consider the opportunity to never will be." staged by the Smithsonian Institution. study under her to be a rare privilege, Educational opportunity has been a No one fortunate enough to have wit­ as indeed it is. national priority since Jefferson's nessed those three generations of Ms. Hawes observed of the 1984 folk days. Section 127 of the Tax Code has women perform with rare grace and arts fellows: "In a larger sense we did provided women and minorities in par­ beauty could come away without a not choose them; they have used their ticular a chance to learn and advance new appreciation of Hawaiian hula. lives to choose creativity, beauty and which earlier they often could not Most of us are accustomed to "hula quality and it was that life process afford. Section 127 has helped improve auwana" or modem hula, accompanied which recommended them to this cele­ the quality of American managers and by languid-sounding music. In contrast bration of artistry in American life.'' teachers and assisted countless Ameri­ "hula kahiko" or traditional hula is The artistry of "Aunty Kau'I" Zut­ can workers to secure the skills they much more forceful and performed termeister is an outstanding reason need in this new age of high technolo­ often to a drumbeat sound and an why it is a great privilege for me to gy. And this, Mr. President, provides almost mesmerizing chant. represent the vastly gifted Hawaiian our Nation with a better informed citi­ Aunty Kau'i, born Emily Kau'i-o­ people of our Aloha State in this zenry. makawelina -lanio- kamano'okalanipo Chamber, Mr. President. · I urge my colleagues to support S. on the island of Oahu in 1908, was 249, to extend tax-free educational as­ among five people, all women, identi­ sistance to working Americans.e fied by the Bernice P. Bishop Museum ORDERS FOR WEDNESDAY in 1970 as "Loea hula," or experts in ORDER FOR RECESS UNTIL 10 A.M., FOR THE REC­ the traditional hula; of the five only AUNTY OGNITION OF CERTAIN SENATORS, AND DESIG­ KAU'I AND HULA AS Mrs. Emily Zuttermeister is still active NATING PERIOD FOR TRANSACTION OF ROUTINE FOLK ART in its performance and instruction. MORNING BUSINESS Mr. MATSUNAGA. Mr. President, it She is of Hawaiian descent and her Mr. BAKER. Mr. President, I ask was my privilege last Thursday to parents, following the Hawaiian unanimous consent that when the attend a Capitol reception to honor 17 "hanai" practice of the time, gave her Senate completes its business today it distinguished American folk artists, to her maternal grandparents to raise. stand in recess until the hour of 10 winners of the Third Annual National Thus she grew up surrounded by old a.m. tomorrow; that after the recogni­ Heritage Fellowships sponsored by the Hawaiian custom. Her uncle, Sam Pua tion of the two leaders under the National Endowment for the Arts. I Ha'aheo, a police officer and elder of standing orders there be special orders can report to my colleagues that it was his church, also held the traditional in favor of the following Senators: a richly awarding event to meet such position of "lawai'a kilo" or fish spot­ Senators QUAYLE, MURKOWSKI, STEN­ talented artists in many fields repre­ ter who stands on a high place and di­ NIS, NUNN, and PROXMIRE for not to senting 13 States, 6 of them new to rects the fishing boat. He kept his exceed 15 minutes each, to be followed the Endowment's Folk Arts Program knowledge of the hula and the ancient by a period for the transaction of rou­ including my own. The 1984 fellows chants secret until he was an old man. tine morning business until 11:30 a.m., join 31 others recognized in the previ­ In 1933, he decided it was time to in which Senators may speak for not ous 2 years. Arts Endowment Chair­ pass on this knowledge. He opened a more than 5 minutes each. man Frank Hodsoll observed that "hula halau" or hula house on the The PRESIDING OFFICER